IBRAHIM v GOLDMARK JEWELLERS PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBy ACJ, HANDLEY JA and ROLFE AJA 19 July 1995, 19 July 1995 [1995] NSWCA 203 WORKERS COMPENSATION — whether worker employed. MASTER AND SERVANT — whether worker employee or self employed. The appellant, an expert jeweller and goldsmith, given the choice elected to work for the respondents on piece work rates rather than wages. He used precious stones and metals which remained the property of the companies, worked to their designs, and in accordance with their priorities. He mainly worked at the companies' premises, and when he did, wore the companies' uniform. He also did a substantial amount of work at home, kept his own hours, did some work for others, and was paid differing amounts at irregular intervals based on the work he had produced. He lodged tax returns on the basis that he was a self employed contractor. The Judge in the Compensation Court dismissed his claim for compensation on the basis that he was a worker. Held: Dismissing the appeal. The trial Judge was correct. ORDER Appeal dismissed with costs. Kirby ACJ I will ask Handley JA to give the first judgment. Handley JA This is an appeal by an unsuccessful applicant from a decision from McGrath CCJ, Chief Judge of the Compensation Court who had entered an award for the respondent. The applicant was engaged, to use a neutral word, by the respondent to work as a jeweller in its premises producing rings for sale to the jewellery trade in Sydney. When initially contacted by the appellant he was offered by the company a choice of working for wages or at piece rates. He chose to work at piece rates. After working for the respondent companies for some months he experienced an episode of considerable pain whilst engaged in diamond setting at the companies' premises which forced him to give up regular work for the respondent companies and, this in due course, led to his claim for workers compensation. As [have previously indicated, this claim was rejected by McGrath CCJ, Chief Judge of the Compensation Court on the ground that the applicant was not a worker employed by the respondent companies. The initial engagement was entirely oral and is not really in dispute. The applicant said that when he approached the manager for the second respondent the following words were spoken as appears in evidence: 'Is he asked me - yes - actually he asked me if I like to work as a - under wages or piece work. I prefer at that time to work piece work. Q. What did you understand by piece work? A. Piece work, it is more income and more actually. HIS HONOUR: Q. Payment by results in other words? A. Yes." 2 UNREPORTED JUDGMENTS Throughout their business relationship the companies paid the appellant on a piece work basis. The appellant thus received differing amounts of remuneration from one period to another. He was paid by cheque but irregularly, not always on the same day each week. A schedule of the amounts and dates of his payments is included in the appeal book. Most of the appellant's work was done on the respondents' premises. He worked throughout with the companies' materials. The precious stones and precious metals used to construct or fashion the individual rings always remained the property of the companies. When he worked at the companies' premises he worked in a uniform provided by the companies and with tools and equipment provided and owned by them. The companies nominated which rings were to be produced and laid down priorities. The rings were also executed to the companies' designs. The companies therefore gave instructions to the applicant as to the work he was to do and the order in which he was to do it. On the other hand, the appellant spent a considerable amount of time working at home. There was no precise evidence as to the percentage of his time spent working at home but, as the factory manager of the respondent companies said, he could work at home one or two days a week. It is also clear that he did not have to work set hours. He, unlike the wages staff, did not have to report to the companies' premises at any fixed time and could arrive anywhere between 9.30 and 12 o'clock. To some extent this was because he had done work at home before arriving at the companies' premises and, to some extent, this was because he chose to work as and when he wanted to. The jewellers working for the companies fell into two distinct groups, those who were employed on wages who followed a regime of regular hours, working on the companies' premises at or slightly above award wage rates with the benefit of the additional conditions, statutory or otherwise, which accrued to employees. The second group, in which the appellant was included, were those working on contract who were paid on a piece rate basis, were not subject to the same discipline and did not have the same ancillary benefits as employees but were able, as the appellant was, to earn substantially more than those who were employed on wages. The appellant in his dealings with the Tax Commissioner acted throughout on the basis that he was a self-employed contractor. Tax returns were submitted on the basis that he was in business on his own account. This attitude was not without reality, bearing in mind the fully equipped workshop he had at home. During the period he worked for the respondent companies he also did work for others at his own home. His, what I might call private practice, was only modest but it did exist. In those circumstances McGrath CCJ, Chief Judge of the Compensation Court concluded that the appellant was not an employee and was therefore not entitled to the protection of the Workers Compensation Act. There was ample evidence before his Honour which enabled him to reach this conclusion and indeed, on the whole of the material before him, I am satisfied that his decision was correct. The evidence indicating the exercise of control by the companies over the appellant is essentially equivocal and does not, in my view, establish the existence of a contract of employment. The fact that the appellant did most of his work on the premises of the companies is also equivocal. It was in part dictated by the need for the companies to exercise appropriate security over the precious stones and precious metals which were involved in the work. However the significance of both these factors is URJ IBRAHIM v GOLDMARK JEWELLERS PTY LTD (Rolfe AJA) 3 diminished by the fact that the appellant from time to time did take work home with the consent of the companies and worked in his own premises with his own tools and in his own time. In the end it seems to me that the essential fact here is that the contract was in its form appropriate for a contract between an employer and an independent contractor; that the appellant deliberately chose this form of contract, rather than working for wages, in the full knowledge of what was involved; and that thereafter he acted consistently with the contract being of this nature. The various matters that Mr Ower has relied upon in my view are essentially equivocal and are to be explained by reference to the nature of the materials with which the worker was entrusted and the need of the companies to maintain security over them. Likewise the fact that whilst on the companies' premises he was dressed in the companies' clothing, can also be explained by their need to maintain control over the precious stones and precious metals which with their staff and contractors were working. In the end I have concluded that the decision of McGrath CCJ, Chief Judge, was correct and that the appeal should fail with the usual consequences. Kirby ACJ This is the second case today in which the issue of the character of employment of work as employment has arisen. In an earlier decision in Mulhall v Roberts the Court expressed the principles which are to be applied in such cases. Those principles are not really in doubt. This case has proceeded to an examination of the application of those principles to the facts. Once again I consider the matter to be at the borderline. I imagine that it is in the nature of the self-selection of litigation that borderline cases only will be brought to this Court. For the reasons given by Handley JA, and for the reasons which were given at first instance by the learned former Chief Judge of the Compensation Court, I am of the view that this case falls on that side of the line which the Chief Judge of the Compensation Court determined. No error has been shown which would authorise this Court to disturb his Honour's assessment of the case. I would therefore agree that the appeal must be dismissed with costs. Rolfe AJA I agree with the orders proposed by Handley JA and his reasons therefor. Kirby ACJ: The orders of the Court are the appeal is dismissed. The appellant must pay the respondent's costs. Appeal dismissed with costs. COUNSEL: Appellant: TOWER Respondent: L KING SC/PL PERRY Appellant: PAUL A CURTIS AND CO Respondent: VANDERVORDS