Industrial Relations Commission of New South Wales CITATION: Kava and Buli v Uniting Care Ageing NSW ACT [2007] NSWIRComm 1032 APPLICANTS Ruci Kava (IRC 06/3419) PARTIES: Mereani Buli (IRC 06/3421) RESPONDENT Uniting Care Ageing NSW ACT FILE NUMBER(S): 3419 and 3421 of 2006 CORAM: Tabbaa C CATCHWORDS: Agency Staff class 457 temporary visas Industrial Relations Act 1996 Nurses and Midwives Act 1991 LEGISLATION CITED: Award Charitable, Aged and Disability Care Services (State) Award Nursing Homes, Nurses &c. (State) Award Advanced Australian Workplace Solutions Pty Ltd -v- P Fox and Kangan Batman TAFE - S0253 Australian Mutual Provident Society v Allan [1978] 52 ALJR 407 Building Workers' Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 Damevski v Giudice, President of the Australian Industrial Relations Commission and Others [2003] FCA 252 CASES CITED: Drake Personnel Ltd v Commissioner of State Revenue (Vic) (1998) 40 ATR 304 Hollis v Vabu Pty Ltd (2001) 207 CLR 21 Sheehan v Australian Contracting Solutions [2001] NSWIRComm 1046 - 16 July 2001 Stevens v Brodribb Sawmiling Company Pty Ltd (1986) 160 CLR 16 Swift Placements Pty Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 9 Teen Ranch Pty Ltd v Brown (1995) 11 NSWCCR 197 HEARING DATES: 20/03/07 DATE OF JUDGMENT: 24 July 2007 APPLICANT Mr D Graham Workwise Management Pty Limited LEGAL REPRESENTATIVES: RESPONDENT Mr S Borrow Leana Street Consulting Pty Ltd DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: TABBAA C 24 July, 2007 Matter Nos IRC 3419 of 2006 Ruci Kava and Uniting Care Ageing NSW/ACT Application by Ruci Kava re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter Nos IRC 3421 of 2006 Mereani Buli and Uniting Care Ageing NSW/ACT Application by Mereani Buli re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 INTERLOCUTORY DECISION [2007] NSWIRComm 1032 1 Ms Ruci Kava and Ms Mereani Buli (the "Applicants") filed claims pursuant to s. 84 of the Industrial Relations Act 1996 on 02 November 2006 seeking relief for their alleged unfair dismissal by Cytech Intersearch Pty Ltd and ano, the other Respondent being Uniting Care Ageing NSW/ACT. At the time their dismissals took effect, 08 September 2006, both were engaged as Residential Care Officers/Assistants in Nursing pursuant to the provisions of the Charitable, Aged and Disability Care Services (State) Award at Wesley Gardens, a home operated by the latter organisation. 2 During proceedings before Murphy C. on 23 November 2006, the issue of jurisdiction was raised and the Applicants acknowledged that Cytech Intersearch Pty Limited was an incorporated entity and sought and were granted leave to discontinue proceedings against that firm on 01 December 2006 pursuant to Rule 138 of the Industrial Relations Regulations 2006. 3 Conciliation attempts on 14 December 2006 before Murphy C failed and, at the request of the parties, a filing schedule was directed and the matters remitted for listing for an interlocutory hearing on the notice of motion brought by the Respondent to determine the threshold issue as to whether Uniting Care Ageing NSW/ACT was the employer of both Applicants. The matters were listed for hearing before the Commission as currently constituted on 20 March 2007. 4 On application by the Applicants, and with the consent of the Respondent, both matters were formally joined for the purpose of hearing and for the delivery of the interlocutory decision. 5 Mr D Graham, Industrial Agent, appeared on behalf of the Applicants and called evidence from: Ms Ruci Kava Applicant Ms Mereani Buli Applicant 6 Mr S Borrow, Solicitor, appeared with Ms V Roper on behalf of the Respondent and called evidence from: Mr Bernard O'Bree Company Director/Sales Director/Recruitment Manager - Cytech Intersearch Ms Sally Wilson Manager - Low Care, Wesley Gardens Aged Care BACKGROUND 7 Cytech Intersearch Pty Ltd (Cytech) enters into formal contractual arrangements with its clients to provide them with nursing staff at a set charge-out rate. In return its clients guarantee to provide each individual staff member with a minimum employment period of 18 months. 8 Cytech expends approximately $10,000 per nurse for costs associated with overseas recruitment. It advertises for and interviews applicants, applies and obtains temporary business long stay standard business sponsorship visas (hereinafter referred to as 457 visas) for them and relocates them to Australia, including paying for their airfares and those of their dependants. 9 Prior to their relocation, recruits are required to enter into an employment contract with Cytech which provides that they are full-time salaried employees of that firm. It further provides that, at the conclusion of the 18-month period of the contract, if the client does not provide a month's notice of its intention to extend the period of the contract, the nurse will have three options - the nurse may return to their home country, or obtain direct employment with that client or find an alternative employer willing to take on the immigration obligations on behalf of that nurse. 10 Both Applicants were recruited by Cytech to work at the Wesley Gardens Aged Care site of Uniting Care Ageing NSW/ACT. 11 Ms Kava and Ms Buli commenced employment on 18 April 2005 and 19 December 2005 respectively. Both were served with notice on 11 August 2006 that their employment would cease on 09 September 2006 as the Respondent had no further work for either of them and Cytech could not transfer them to work for any of its other clients. 12 The Respondent objected to the applications being proceeded with on three bases - it was argued that, firstly, the Respondent was not the employer of the Applicants and that they had been employees of Cytech, a constitutional corporation; secondly, the Respondent did not, and could not, terminate the employment of the Applicants; and, thirdly, there was neither a written contract between the parties nor can a contract be inferred from the conduct of the parties. 13 The Applicants urged the Commission to find that Cytech was merely an agency acting on behalf of the employer, that the true employer was Uniting Care, and therefore should have been the Respondent in these proceedings. THE EVIDENCE 14 The evidence provided on behalf of the Respondent, the Applicant in the Notice of Motion, was, in the main, given by Mr O'Bree, Company Director/Sales Director/Recruitment Manager - Cytech Intersearch (hereinafter referred to as "Cytech"). Mr O'Bree tendered very detailed statements regarding the contractual relationship between Cytech, an employment agency, and the recruited nurses on the one hand and Cytech and its clients on the other. Those statements were expanded on during oral evidence. That evidence is summarised below. 15 Cytech had, at that time, two clients - the Uniting Care Ageing NSW/ACT and Kennedy Health Group at Kogarah which ran about seven aged care facilities. 16 Mr O'Bree stated that, owing to the impact of the acute nation-wide shortage of nurses and the less than attractive location of Wesley Gardens Aged Care Centre in terms of public transportation, the now-defunct organisational division of the Respondent, Uniting Care Ageing Ku-ring-gai, entered into a formal Health Care Services Agreement (the "Supply Agreement") with Cytech on 27 September 2004 under which the latter would source, recruit and hire out temporary nursing staff to the former contingent on that staff being able to obtain registration pursuant to the New South Wales Nurses and Midwives Act 1991. 17 Cytech obtained from the Respondent the required commitment that it would hire each individual staff member for a minimum period of 18 months. At the conclusion of that period, the client can either extend the period of the contract or may hire the nurse directly, if that nurse has obtained permanent residency. 18 The Supply Agreement stipulated that the nursing staff supplied by Cytech were not employees or agents of the client but, rather, were full-time salaried employees of Cytech. Mr O'Bree stated that it was emphasised in the contract for two main reason - firstly, to reinforce the Department of Immigration and Citizenship (hereinafter referred to as "DIAC") 457 requirement to employ and pay wages to the staff directly; and, secondly, to delineate between the client's responsibilities and Cytech's responsibilities as the employer. 19 In fulfilment of its obligations as the employer and in meeting its DIAC responsibilities under the visa, Cytech was responsible for effecting all insurances required under the Registered Nurses compensation legislation and superannuation laws, in addition to paying superannuation contributions and payroll tax where applicable. In that regard, three Certificates of Currency were tendered - · from CGU to Cytech, dated 26 October 2006, covering the full amount of the employer's liability under the Workers Compensation Act 1987; · from Liberty International Underwriters to Cytech, dated 15 November 2006, for public liability insurance; and · from AFM Insurance Brokers Pty Ltd to Cytech, dated 23 February 2006, for Professional Indemnity insurance. 20 In addition to taking out a $10 million professional indemnity insurance cover on behalf of its employees, it was a requirement in the Supply Agreement that the Respondent maintain Professional Indemnity Insurance for the Health Care Professionals supplied by Cytech. 21 Cytech also enrolled its Health Care Professionals, immediately upon their arrival in Australia, for membership of the College of Nursing thereby providing them with immediate personal professional indemnity insurance. 22 Mr O'Bree denied that its professional indemnity policy related to its recruitment practice only. He gave the example of one of Cytech's South African nurses who had to appear before the Coroner's Court because one of her patients, who was suffering from dementia, had choked on a chicken bone. That nurse had been represented by Cytech through its professional indemnity insurance, and by the Royal College of Nursing, through her membership of that organisation which Cytech encouraged. Uniting Care had no involvement in that matter. 23 Clients who were non-profit organisations were required to sign a payroll tax exemption form so as to also exempt Cytech from payment of that 6% tax to the State Government. 24 Cytech negotiated the wages to be paid directly with the nursing staff. The Supply Agreement stipulated that the Respondent was to utilise the Agency staff for no less than five shifts in each seven day period, albeit provision was made to work additional hours. The Agency employee was required to complete a weekly time sheet, to submit it to the Respondent to be checked and approved, and then to forward it on to Cytech. That time sheet formed the basis for calculation of both the wages paid by Cytech to the employee and for the sum invoiced to the Respondent by Cytech. 25 The Supply Agreement further provided that allowances and loadings were payable by Cytech in accordance with the prevailing industrial instrument on site and recoverable from the Respondent at cost. 26 Cytech was required to invoice the Respondent monthly for the services of the agency staff, including GST, at the agreed rate set out in the schedule to that Supply Agreement. 27 Invoices were payable within 30 days of the date of issue. The Supply Agreement stipulated that a penalty of 2% above the Westpac Bank's primary rate would be incurred by the Respondent for overdue amounts. 28 Attention was drawn to the fact that the Supply Agreement included a "Non-Solicitation" clause restraining the Respondent from inducing agency staff to leave the employment of Cytech during the period of the employment contract. In addition, the Respondent was restrained from employing agency staff upon conclusion of their contract with Cytech unless certain conditions were met. It was pointed out that such provisions would not have been included had Cytech been acting simply as an agent for the Respondent. 29 It was pointed out that Cytech had to adopt a commercial approach bearing in mind the enormous overheads involved in setting up infrastructure for the recruitment and employment of people internationally and for the administration, on-going supervision and control of the system internally. 30 It was further pointed out that there would be many instances where Cytech would have to actually bear the cost of people who were repatriated well within the period of the contract considering that it cost Cytech in the vicinity of $10,000 to bring each recruit into Australia. 31 The 18-month period of engagement of the Applicants was clearly not a fixed term period because termination provisions were provided for in the Supply Agreement. The Supply Agreement provided that it may be terminated by either party on the provision of one month's written notice. In relation to the termination of the engagement of any of the agency staff for one of the reasons stipulated in the Supply Agreement, notice was required to be served on Cytech, five business days prior to the notice of termination of engagement, specifying the nature of the breach. Thereafter 30 business days' notice was required in order to provide a substitute agency employee for the remainder of the contract period. Cytech was at liberty to terminate the Supply Agreement summarily in the event the Respondent became insolvent. 32 The Respondent, whilst under no contractual obligation to continue the arrangement beyond the 18-month period, could elect to extend it by providing Cytech with written notice of its intention to do so one month before the end of that period. 33 Cytech did not shy away from its OH&S responsibilities towards the Health Care Professionals. It held both itself and its clients responsible for providing them with a safe place of work. 34 Cytech placed its nursing staff with its clients at no charge for the first week of their employment, termed the "supernumerary week" and if further assimilation time was necessary, that period was extended for a further week. The supernumerary period was not taken into account in developing the service fee and charge. During cross-examination, Mr O'Bree stated that: "The purpose of the supernumerary period is to offer that as a period for training, so whilst we don't undertake direct training, because as you stated earlier, we're not an aged care facility and we're not licensed to be, what we do is we actually offer the supernumerary period to enable the facility to use that period for the purposes of training. So in effect we do pay for the training, but we don't actually conduct it as such." 35 Attached to the Supply Agreement between Cytech and the Respondent were a series of schedules relating to each individual staff member. Those schedules outlined the period of employment (18 months), the start date, and the various rates applicable for different days of the week. Over the 18-month period of the contract for supply of an individual employee, there may be anything up to 15 variations to the Supply Agreement as the schedules reflected movement in grades or classifications of the employee concerned. 36 Cytech did not burden its clients with the up-front costs associated with the employment of nursing staff from overseas. It paid all such expenses directly. 37 Mr O'Bree went on to provide evidence in relation to the contractual relationship between Cytech and the Health Care Professionals it recruited from overseas. 38 Cytech advertised for nursing staff overseas. It provided a 5 or 6-page blank application form on its webpage. In requiring Applicants to "apply on line", it advised that: "These forms are crucial in assisting us to present your details for a position with our clients. Please note you must obtain an email address to receive future correspondence. If you wish, you may use a friend or colleague's email address. Once all information is received, one of our recruitment consultants or recruitment manager will be in touch with you". 39 Both Applicants had been recruited from Fiji in that manner. Tendered in the proceedings were notes of the interviews conducted with each of the Applicants as part of the recruitment process. 40 For immigration purposes, both were designated as "Residential Care Workers" because neither of them had secured the requisite qualifications for registration in Fiji at the time of recruitment. 41 Australia does not grant nurses from Fiji automatic registration. Nurses from there are required to successfully undertake a 3-month transitional course prior to registration being granted. Once the nurse signs an authority, Cytech acts on behalf of that nurse by applying, paying, and setting up their registration prior to applying for their visas. Cytech had undertaken all of that on behalf of the Applicants. 42 As was its practice. Cytech negotiated a rate of pay and entered into employment contracts, for 18 months duration, with both applicants. 43 The contract locked the nursing staff in for 18 months to allow Cytech to achieve its margin and amortise the costs it had incurred in relation to that employee. The Employment Contract went on to provide the Applicants with three options upon conclusion of the period - to remain with Cytech or seek to transfer their employment to the client directly or to find another sponsor. 44 Prior to their arrival in Australia, Cytech provided the Applicants with a document explaining the relocation process. It advised that Cytech would pay for two weeks' accommodation (currently capped at $600), air fares, arrival fees, and so on. However, the Applicants were required to bring a certain amount of cash into Australia with them. Mr O'Bree gave evidence that Cytech has had nurses get off the plane in the past with literally $5 in their pocket. 45 Cytech paid for their relocation to Australia, including airfares for them and their dependants. 46 The Applicants were met upon their arrival at Sydney Airport by dedicated Cytech Relocation Managers. As an example, Ms Julie Irvine, Cytech's Relocation Consultant, organised accommodation for Ms Kava through Jamison's Real Estate prior to that Applicant's arrival in Australia. Cytech signed the lease on her behalf and arranged for the lease to be transferred to her when she arrived in Australia. 47 A loan agreement was entered into between Cytech and its employees repayable by the nursing staff over the 18 months of the contract. It related to funds expended by Cytech in leasing furniture and electrical equipment from Radio Rentals, and purchase of basic household items like crockery, cutlery, and so on to furnish their accommodation. Mr O'Bree would not agree with the proposition that, as far as possible, the company was cost neutral insisting that each nurse cost the company approximately $4500 which it passed on as part of the contract cost to the client otherwise it would not be in business. 48 The Applicants went through a 2/3 day relocation process with Ms Irvine, during which assistance was rendered in setting up bank accounts, setting up tax file details and other ancillary matters. 49 Mr O'Bree gave evidence that Cytech assisted its staff with "absolutely everything" including referrals to immigration consultants if they wished to apply for permanent residence in Australia. The only guarantees Cytech gave its employees were in relation to the 18 month tenure and their safety in Australia. 50 It was stated that there was incontrovertible evidence in all the material put before the Commission that Cytech was the employer of both Applicants: · The Applicants confirmed that all of the documents relating to their recruitment and employment were, without exception, Cytech documents; · The employment contracts clearly evinced such an intention, having been executed by the Applicants and faxed back to Cytech before departure from Fiji; · Cytech undertook the responsibility and costs associated with travel arrangements, accommodation and visa applications; · A fresh copy of the contract was executed upon their arrival in Australia. Attached to each contract was a schedule containing individualised terms of engagement with reference back to appropriate clauses within the contract; and · Cytech maintained time sheets, paid their wages directly to them, issued them with pay slips and remitted group taxation to the Australian Tax Office. 51 Cytech was neither licensed nor registered to run nursing homes nor did it run an aged care or health service facility. The relevant award for agency staff, that is, persons not directly employed by aged care facilities, is the Nursing Homes, Nurses &c. (State) Award. It was submitted that it was the appropriate award to apply to both applicants because they were employed by Cytech. Direct employees of Wesley Gardens Aged Care were engaged pursuant to the Charitable Aged and Disability Care Service (State) Award. 52 DIAC required Cytech to pay a certain annual salary to its nursing staff which was greater than that stipulated in the Nursing Homes &c. Nurses (State) Award. It used to be $38,000 and had increased to just under $42,000 compared to the minimum award rate of about $36,000/$37,000. DIAC required Cytech to comply with all other conditions of the award. 53 Cytech charged its clients $35.25 per hour which equated to $69,829 per annum. 54 The 457 visas required the sponsor to be the direct employer and therefore totally obligated to ensure the medical and financial wellbeing of the employees. As the 457 visas for the nursing staff were applied for by Cytech, the nursing staff would be in breach of that visa if they "moonlighted" by working for another employer who did not carry the legal obligations attached to that visa. DIAC had to be notified if the contract with the client was terminated, or if the employee's grade altered. Cytech was audited on a regular basis, at least every six months, and was also subjected to snap audits to ensure that the employees were being paid correctly and that all legal requirements were being met. Cytech risked losing its licence if it breached departmental requirements. 55 Mr O'Bree pointed out that Cytech would only ever allow a client to take over the employment of a nurse within the 18-month period if that nurse had obtained permanent residency and the client agreed to pay a monthly service fee, billed weekly, until the conclusion of the 18 months. That was because its margin and costs were built into that 18-month period. However, Cytech would not actively recruit any employees from overseas for direct employment by a client. 56 It was emphasised that the contractual relationship between the Respondent and Cytech was not a sham arrangement that was designed to offend public policy by subverting the award structures. It was pointed out that the applicants received benefits well in excess of award provisions to the point that the sum total of their wages and overheads equated to rates received by registered nurses. That was despite the fact that they were unable to secure registration which would qualify them for receipt of such higher award rates. It was pointed out that the wage rates payable to them was the primary reason why the Respondent ultimately could not maintain the engagement of the Applicants. 57 The employment contract between Cytech and the Applicants spelt out the terms of the engagement, viz. Cytech agreed to employ the employee and the employee agreed to be so employed to provide health services for the team exclusively for Cytech. It was intended to ensure that the Applicants understood the relationship between Cytech, the client, and the employee. It was a requirement of DIAC that Cytech be the actual employer and it was illegal for any of the nurses brought into Australia on the 457 visa to be employed, or paid, by a third party. Breach of that term would result in cancellation of the visa and subsequent deportation. 58 The employment contract ensured that the nursing staff were aware that they could be redeployed, for instance, where the contract between Cytech and a client for provision of labour was terminated. 59 It also emphasised that the nursing staff were subject to control, direction and supervision of Cytech however, they were also to work for, and comply with, instructions issued by its clients. 60 Cytech, in its capacity as employer, was contractually obligated to pay the employee's salary. The Applicants were required, and did, complete a standard Cytech weekly time sheet, had it authorised by the client as to its accuracy, and submitted it to Cytech by the Monday following each week worked. The information submitted served a dual purpose - it enabled Cytech to calculate the wages payable to its employees and to invoice the client for their services. All relevant time sheets were attached to the invoices forwarded to the client. The time sheets varied from facility to facility depending on the individual requirements of each facility. The Applicants' banking details were held by Cytech. The employment contract further stipulated that payment for additional hours would not be made without prior approval of Cytech or the Respondent. 61 The Employment Contract further stipulated that Cytech was obliged to make superannuation contributions on behalf of its employees, administer and provide payment for annual leave, sick leave, all allowances, loadings and overtime. 62 Termination of employment could be effected by Cytech or the Applicant by the provision of one month's notice albeit the Employment Contract placed serious brakes and checks on the ability of the Applicants to do so. 63 Cytech charged out afternoon and night rates at cost. Clients were only invoiced for the cost of any additional overtime beyond afternoon and nights so that ultimately its employees benefited for undertaking those types of shifts rather than being penalised for being rostered for those shifts. 64 The client was responsible for preparing the rosters, however, the nursing staff were at liberty to swap with one another to suit themselves. 65 The pay slips forwarded to the Applicants set out how many ordinary hours they had worked, any penalty rates that had been paid, superannuation and any deductions such as for health insurance and payroll tax. 66 Cytech accepted all income tax responsibilities on behalf of its employees and issued all its employees, including the Applicants, with Group Certificates. 67 Cytech's leave policy required that, except for exceptional circumstances, annual leave could not be taken within the first six months of employment. Thereafter, employees are required to provide at least four weeks' notice of their intention to take leave. The vacation policy stated that the request for vacation time was not valid unless the signatures of the Applicant, the client and Cytech were appended to it. Approval was given by Cytech taking into consideration the effect of the timing of the leave on its client. 68 Employees were required to apply for annual leave on a dedicated leave form. In practice, the nurse would call Cytech to confirm how much leave they had accrued. Annual leave accruals varied from four to six weeks depending on how many weekends, Saturdays and nights they had worked. The application for leave would be submitted firstly to the client. If the client had a problem with the leave sought, then Cytech would intervene to resolve the problem of how to cover her shifts, particularly if the nurse required that time off to undertake courses to become a registered nurse. 69 In order to avoid a situation where Cytech had to carry leave liability which could be quite expensive, the leave policy stipulated that leave must be taken when it fell due, that is, it could not be rolled over into the following year. Mr O'Bree pointed out, however, that policy was not adhered to in practice. In fact, Ms Kava had accrued seven weeks' leave towards the conclusion of 18 months of employment. 70 Mr O'Bree categorically denied that staff were not allowed to roll over their leave. He pointed out that most residential care officers were Assistants in Nursing. It was much easier for them to find other employment at the end of their 18 months if they were registered nurses. In addition, they could not apply for permanent residence in Australia without that registration. For those reasons, Cytech, with the assistance of Wesley Gardens, assisted them in obtaining a position within the nursing college to obtain the requisite 3-months training. The nurses were thus encouraged, despite the vacation policy, to accumulate as much of their leave as they could and that, together with six weeks' leave without pay, should hopefully be enough to put them through registration training. Once registration was obtained, they had the option of either remaining in employment with Cytech, or obtaining employment with Wesley Gardens or with another employer. A large number of the 20 nurses Cytech had on hire to Wesley Gardens at that time were undergoing training for registration, one nurse had been shifted from one site of Uniting Care to another position and another had obtained registration and found alternative employment with Manly Public Hospital. 71 Tendered were questionnaires completed by the Applicants providing feedback on Cytech's services for Quality Assurance purposes. That appraisal method was also used to investigate and resolve problems between its nursing staff and clients. 72 Mr O'Bree went on to provide evidence as to why and how the termination of the Applicants had occurred. Wesley Gardens had approximately 30 nurses on hire from Cytech. It undertook a restructure and decided, for commercial reasons, to reduce the number of staff it hired from Cytech by six. As a result of negotiations between the contracting parties, Cytech offered to cut its rates to salary plus on-costs thereby enabling Wesley Gardens to retain two (Ms Basu and Ms Salatay) out of the six nursing staff under notice. 73 Cytech was legally obliged to notify DIAC if any of the four employees could not be placed. It therefore made every effort to find them alternative employment. Alternative employment was found with Thompsons, a previous client and private aged care facility at Terrey Hills for one of those four nurses. In relation to the Applicants and another employee, Cytech was unsuccessful in obtaining alternative employment for them. 74 Correspondence was forwarded to the Applicants and another advising of the termination of the contract with Wesley Gardens for provision of labour, Cytech's inability to find them alternative employment, and when their employment would cease. In relation to Ms Buli, her employment ceased on 08 September 2006. In relation to Ms Kava, she was further advised that as she was close to completing her 18 months, her employment contract was extended by seven weeks, the equivalent to her accrued annual leave, to provide her with an opportunity to seek out a new sponsor. 75 Mr O'Bree conceded that Cytech did not have complete control of every aspect of its business but pointed out that it would be ludicrous to hold such an expectation. Nevertheless, Cytech had to manage multiple relationships as a result of its role as employer. It would step in and take over the process of managing any employment concerns impacting on the employee/client relationship; it dealt with union issues; it dealt with any concerns/enquiries from its employees (including such trivial matters as to directions on how to get around Sydney); and it managed the relationship with DIAC. 76 Ms Sally Wilson tendered a statement in the proceedings in which she stated that she was Manager of the Low Care Hostels at Wesley Gardens and had direct knowledge only of Ms Kava's work. Part of her job was to set rosters and direct hours to be worked. She had taken no part in the hiring of the Applicants to work at that site. Her only involvement was to provide details to the Director of Nursing of what vacant shifts needed to be filled. 77 She gave evidence that the Hostel Co-Ordinator and another member of staff were charged with the responsibility for familiarising Agency staff with the work routines. In-house educators usually conducted short courses (approximately one hour duration) on subjects such as infection control practices. External training providers for the nursing industry, members of ACS, were also utilised for the purpose of more intensive training (ranging from half a day to a full week). 78 Ms Wilson stated that the training received by Ms Kava was of the same type and quality as that provided to direct employees working in the same area. 79 Ms Wilkins confirmed that Wesley Gardens did not approve applications for leave from employees of Cytech. If Cytech nurses wanted leave, they completed their Cytech standard leave form and submitted them to her. She checked the application against the roster, checked to see how many nurses were wanting leave at the same time, and ensured that the operational needs of the establishment were covered during that period prior to signing the form and forwarding it to Cytech. 80 For Wesley Gardens direct employees, she would ensure that the operational requirements of the establishment were met and would ensure that they had sufficient accrued annual leave to cover the period requested prior to approving the leave and forwarding it on to the payroll department. 81 Ms Wilkins stated that the Respondent did not provide Ms Kava with a standard uniform to wear. Agency employees were required to comply with Wesley Gardens' dress code. Its direct employees had a uniform which was in the process of being reviewed. 82 Ms Wilkins explained that the purpose for which a position description is created is to provide parameters for what a job entails. The position description tendered by Ms Kava, she explained, was generated by the Respondent's Human Resources Department following feedback from her as to whether the description accurately reflected the duties undertaken in that role. During cross-examination, Ms Wilkins stated that she had not supplied Ms Kava with a copy of that position description and could not explain why Ms Kava had signed it to acknowledge its receipt. Ms Wilkins agreed, during re-examination, that the position description was a generic document that applied to all Wesley Gardens direct staff within that designation. She could not understand how it was that an agency employee received a document of that nature. 83 Ms Wilson stated that, up until August 2006, she did not have the delegation to hire and fire employees, a role confined to the Director of Care. In relation to filling shifts, she would notify the Executive Director of Care who would give her the authorisation to advertise the positions through the Human Resources Department. 84 Up to and around about mid August 2006, there were common policies applicable to both the low care and high care sections of the facility. A restructure of the facility resulted in the previous structure of a Director of Care and two Deputy Directors of Care being replaced by three Managers of Care, each managing separate areas. The previous Director of Care became the chief nurse and assumed ultimate responsibility for policies and hiring and firing following consultation with her staff. 85 Ms Wilkins confirmed that agency staff were clearly distinguishable from direct employees for the purposes of rostering. 86 Ms Wilkins confirmed that all the training received by Ms Kava, without exception, dealt with occupational health and safety or duty of care issues. She explained that agency staff were provided with that training because: "They're working on our premises, so therefore we have a duty of care to them to ensure that for instance with the fire awareness, should there be a fire when that particular person is on duty, they have an awareness and a knowledge of what to actually do under those circumstances.... Well, I mean, people that are working on our premises, we still have a need to look after their safety, as we do with contractors. We look into, you know, what sort of courses and what sort of precautions they take when they come onto our site." 87 The Applicants provided both written statements and oral evidence in support of their claims and these are summarised below. 88 Ms Marianni Buli tendered a statement in the proceedings in which she confirmed that she had signed an earlier version of the employment contract prior to arriving in Australia and again on 16 December 2005 upon her arrival. 89 She confirmed, during cross-examination, that she had held telephone conversations with Mr O'Bree or someone else from Cytech before she came to Australia, and that it was fairly clear that she was to be an employee of Cytech. 90 She confirmed that she had carefully read the employment contract and understood most of its terms, if not all of them, before she signed it. She further confirmed that included in that contract was a clause 5 which stated: "The employee shall follow the directions and supervisor of Cytech Intersearch and the client unless otherwise directed by Cytech Intersearch" meaning that Cytech would have the ultimate say in directing how she was to perform. 91 Ms Bulli also confirmed that her superannuation contributions were made by Cytech. 92 She had taken sick leave and annual leave while working at Wesley Gardens and recalled that she had completed the Cytech sick leave and annual leave forms respectively. 93 During cross-examination, Ms Buli was shown the position description she had tendered with her statement. She confirmed that it was her signature that was appended to that document which was dated 29 July 2005. She agreed that she was not in Australia at that time and that, in fact, it was dated some 4.5 months prior to her arrival in Australia. She stated that she could not remember if she had dated it when she signed it. 94 When it was pointed out to her, during cross-examination, that it was obvious from the font used that the signature page was not part of the three pages that preceded it, Ms Buli had no explanation for that nor could she recall how she came to have a copy of the job description. Mr Graham, upon examination of the document, conceded that the signature page was from a completely different document. 95 Ms Buli confirmed that she had not received any direct payments from Wesley Gardens. All entitlements were paid to her by Cytech. 96 Ms Buli further confirmed that she had not been provided with a uniform by Wesley Gardens and that her contract with Cytech stipulated that she had to bring into Australia with her white tops and black or blue slacks. 97 She acknowledged that she had not been instructed to wear a logo, however, she pinned a badge on her uniform which, she insisted, had been given to her by the Director of Low Care at Wesley Gardens. She recalled that her name had been typed on it. She insisted that it was not just a name tag because it had a logo on it. The badge was not produced in evidence. 98 Ms Ruby Kava tendered a statement in the proceedings in which she stated that all directions as to how the work was to be carried out were delivered by a variety of supervisors engaged directly by Wesley Gardens despite the contract provision that she shall follow the direction or supervision of Cytech Intersearch as well as the client. 99 She agreed that she had entered into an employment contract with Cytech prior to her arrival in Australia as she had faxed a signed copy back to Cytech. In addition, upon her arrival in Australia, she had re-signed it at the same time as she was offered other employment-related documents to sign. She had retained a copy of the schedule appended to it and subsequent variations to the schedule. She confirmed that she had not entered into any such agreement with Wesley Gardens at any time. 100 She agreed that she understood the meaning of the terms set out in the employment contract, including the warranty that the representations she had made in the contract were correct and the agreement to be employed by Cytech. 101 She confirmed that she completed the Cytech timesheets, had them checked and countersigned by the Registered Nurse on duty and faxed them to Cytech fortnightly. She further confirmed that she had received all her entitlements from Cytech. 102 She understood that Cytech was responsible for granting and paying for annual leave but pointed out that she had submitted her leave applications to Gillian Hunter (the Private Assistant to the Deputy Director of Care at Wesley Gardens). 103 She recalled that approximately 12 months after commencement of employment, she had been requested by Cytech to complete a questionnaire regarding workplace issues and her general experience in working at Wesley Gardens. She agreed that some of her answers had been quite expansive. 104 She recalled that she only reported in sick once during her 18-month stint at Wesley Gardens. At that time she had completed a Cytech sick leave application form. 105 Ms Kava acknowledged that she had received notice on 11 August 2006 that she would be terminating at Wesley Gardens on 08 September 2006. Yet she had tendered a position description which she had signed and dated 25 August 2006. Ms Kava provided the following explanation as to how she had come into possession of that document. She recalled that her unit co-ordinator, Sharon Foggett, advised her that she was going to make arrangements for her to undertake a performance appraisal. Ms Kava had replied that she had been undertaking her work for almost 18 months without the benefit of a position description. She questioned how an assessment could be carried out without such position description. She stated that on the very next day, Ms Foggett handed her a position description and advised that she would be assessed in a week's time. Ms Kava agreed, during cross-examination, that she had not obtained the document from any of three senior people who had the ability to either extend, or recommend the extension of, her employment contract - the Chief Executive Officer, the Director of Care and the Deputy Director of Care of Wesley Gardens. 106 Ms Kava denied that she had been advised of the three options that were available to her. She stated that she had merely been advised that their return flights to Fiji had been booked by Cytech. 107 Ms Kava was unemployed from 08 September 2006 until 11 December 2006 at which time she obtained alternative employment. She confirmed that she had seen the advertisement for her position at Wesley Gardens in the Manly Daily on 16 September but had not applied for the job. 108 She stated that she was not aware of the unfair dismissal laws. She had spent three months ringing friends for advice and help until she contacted the Fiji and Pacific Islands Association of Australia on 19 October 2006 and was advised of the Unfair Dismissal laws. Nevertheless, Ms Kava had not applied for relief relating to her alleged unfair dismissal until 02 November 2006. SUBMISSIONS 109 It was submitted on behalf of the Respondent that there was no evidence of any sham arrangement, or any grievances as to payment of entitlements, or any confusion arising because of any mix of documentation issued by Cytech and by its client. 110 It was also submitted that the Commission needed to be satisfied that the documentation was properly representative of the manner in which the parties actually conducted themselves (Federal Court decision 2003 Federal Court cases at 252, 13 November 2003). That was also supported by the evidence of Sally Wilson - the timesheets, the disciplinary functions, the hours of work set through the rostering system, how the agency nurses, for example, were distinguishable. 111 Mr O'Bree had given evidence of the obligations imposed on sponsors by DIAC in relation to the issue of the 457 visas. Those visas enable Australian businesses to employ overseas workers for a period of between three months and four years. DIAC, at the relevant time known as the Department of Immigration and Multicultural and Indigenous Affairs, posted the following requirement on its website: " The sponsor must be the direct employer of the employee . The direct employer is usually responsible for such things as payment of salaries, pay as you go tax instalments, superannuation, conditions of employment, day to day supervision of the employee". [Emphasis added] Mr O'Bree gave evidence that, if Cytech failed to discharge that obligation, there was a very strong likelihood that it would loose his licence. For that reason, its contracts gave proper effect to the obligations imposed under the 457 visa arrangements. 112 Mr Borrow referred the Commission to the findings in a number of authorities relating to labour hire and agency relationships. The Respondent relied on the judgment in Advanced Australian Workplace Solutions Pty Limited v P Fox and Kangan Batman TAFE (Print S0253 25 October 1999) wherein the Full Bench of the Australian Industrial Relations Commission (Giudice, President, McIntyre,Vice President & Redmond C), in referring to an agency arrangement, agreed [at parag. 90] with the comments of Handley JA in Teen Ranch Pty Ltd v Brown (1995) 11 NSWCCR 197 that, in determining the existence of a contract, the decision in Stevens v Brodribb Sawmilling Company Pty Ltd is not relevant. 113 It was submitted that the Applicants had failed to establish that there was an employment arrangement between them and the Respondent by identifying those elements that go into formation of contract. 114 It was further submitted that even if there was no express contract and the Commission was being asked to imply that a contract existed, the Applicants' evidence failed to identify those elements that go into the formation of a contract in an implied form. 115 The Commission's attention was drawn to the judgment of the Full Bench of the Industrial Relations Commission of New South Wales in Court Session in Swift Placements Pty Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 9 (3 March 2000) involving an agency agreement with some differences. Their honours (Wright P, Walton J, Vice-President, and Hungerford J.), having found no evidence of a sham, were persuaded to dismiss the appeal against the judgement of his Honour, Mr Justice Marks, and confirm the finding that the agency, Swift Placements, was indeed the employer for all purposes. 116 In conclusion, it was submitted that the arrangement entered into between the Respondent and Cytech was also not a sham and the Commission was urged to dismiss both applications for want of jurisdiction. 117 It was submitted on behalf of the Applicants that there was no evidence before the Commission to support the claim by Cytech, which was not a party to the proceedings, that it was the employer of the Applicants. 118 The Commission was referred to the publicly accessible website operated by Cytech, and particularly to its executive summary which, it was pointed out, did not state that Cytech was an employer of persons engaged in the nursing or residential care industries. 119 It was submitted that, without taking into account any penalty rates or allowances payable, it would appear from the figures tendered in evidence before the Commission that Cytech charged Wesley Gardens Nursing Home a minimum of $69,838 per annum for each of the Applicants. 120 It was clear from the information contained on its website that Cytech was an Australian organisation which sourced employees for clients who were unable to, or unwilling, to spend the time and effort in undertaking that search. Mr O'Bree conceded, during cross-examination, that Cytech neither managed, nor cared for, nor was licensed to run nursing or residential care properties. The s 457 visas required the sponsor to pay the air fares to Australia, not only for the employee but for any dependant children. If at the end of the period, repatriation was the option chosen by the employee, then that also was at the expense of the sponsor. It was asserted that the charges paid by the Respondent fully compensated Cytech for all administrative tasks involved in complying with the Immigration Act and its regulations. 121 It was not in dispute that, at all material times, the Applicants' wages were paid by Cytech nor was it in dispute that Cytech administered the leave records and took on the employer responsibilities of the two Applicants in the proceedings. 122 It was also accepted that one of the requirements of DIAC was the payment of its stipulated minimum rates of pay and the observance of relevant industrial awards in relation to other conditions. 123 Nevertheless, whilst it was conceded that Cytech also paid a range of premiums which were required to be paid as a result of being a responsible employer, it was asserted that Cytech did that as part of a commercial arrangement with its clients. In other words, Cytech would charge a premium fee in addition to the actual rates that were being paid to the employees in exchange for its handling of all the administration work. The Commission was reminded of the evidence provided by Mr O'Bree that the arrangement ultimately became too expensive for the Respondent and resulted in a variation that included the dismissal of a number of nurses, including the two applicants. 124 The Applicants asserted that at all material times they were employees of the Respondent and received supervision, directions and training relevant to their employment from that source only. Their equipment had also been supplied by the Respondent. 125 It was pointed out that although Mr O'Bree did not entirely agree that Cytech's role was simply one of dispute resolution, he had not entirely disagreed with that description either. 126 The Applicants cited the summary version in Shirley Christine Graham v Dunnyhire (Vic) Pty Limited [1998] 890 FCA (31 July 1998) in support of its contention that the Respondent was the real employer of the Applicants and that Cytech had only a right to manage and not a right to control: "Mr Goldblatt sought comfort in Stevens v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16. Although Brodribb involved negligence, vicarious liability and the distinction between employee and independent contractor, there is much therein which is of assistance in determining whether a particular relationship is that of employer and employee. However, the distinctions there outlined can be no more than signposts to guide a determination as to the nature of any particular relationship. It is always prudent to commence such an assessment with the following comment of Wilson and Dawson JJ at 37: "...any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance". and the earlier comment at [36]: ".....the control test... is not now a sufficient or even an appropriate test in its traditional form in all cases because in modern conditions a person may exercise personal skills so as to prevent control over the manner of doing his work and yet nevertheless be a servant: Montreal v. Montreal Locomotive Works [1947] 1 D.L.R. 161. at p. 169. This has led to the observation that it is the right to control rather than its actual exercise which is the important thing (Zuijs v. Wirth Bros. Pty. Ltd.)[1955] 93 C.L.R. 561, at p. 571." 127 It was pointed out that the management and control of the Applicants at the workplace was completely undertaken by the Respondent - it prepared the rosters, offered and managed relevant training, and required retraining of people working on its site irrespective of who paid their wages. 128 The Applicants conceded that all payroll documentation, save for two documents relating to job descriptions, were provided by Cytech. It but pointed out that Cytech was paid a management fee to provide such information. The main assertion of the Applicants was that the relationship was one where Cytech was actually and merely managing the payroll and personnel procedures on behalf of Uniting Care. 129 The Applicants gave evidence that both had executed contracts of employment to come to Australia and work for Cytech without any real knowledge of what Cytech was about, what the processes were and what options they had except that there was a job waiting for them. 130 The distinguishing feature of this case were the DIAC requirements that had to be met and the overlay of federal and state responsibility involved in bringing in guest workers from overseas and placing them with clients. 131 It was conceded that the Applicants were paid directly by Cytech. It was pointed out, however, that because Cytech was reimbursed by its client, the true employer was Uniting Care. The Applicants relied on the definition of "employee" contained in The CCH Macquarie Dictionary of Employment and Industrial Relations: "A person working under the control and direction of another (in out-dated terminology, as the 'servant' of a 'master') under a contract of employment (whether implied or in writing) and in return for a wage or salary. With the development of modern technology and increasing multiplicity, diversification and complexity of working arrangements, the concept of employee is expanding..." 132 In conclusion, it was restated that the Respondent was the true employer and not Cytech. It was further restated that Cytech engaged the staff as an agent acting on behalf of the Respondent. While the Applicants would not refer to it as a sham arrangement, it was a "curious arrangement" in that Cytech had set itself up as a specialist in sourcing staff from overseas to fill vacant positions in Australia which cannot be readily filled internally. The visa requirement compelled it to be responsible for those persons which could also translate as "employer". It was argued, however, that the mere fact that they were held responsible by DIAC did not make the staff their employees in a true sense. Whilst Cytech may place them, monitor them, pay them, and so on, it did not actually get involved with the staff until a dispute arose between the staff and the client that needed to be dealt with. 133 The Commission was urged to find that the use by the Respondent of Cytech as an agent to hire and pay the Applicants, did not remove its status as an employer of the Applicants. CONSIDERATION 134 There can be no doubt that employment contracts were entered into between the Applicants and Cytech. I do not accept the submission that the Applicants executed those contracts without any real knowledge of what Cytech was about, what the processes were and what options they had except that there was a job waiting for them when they arrived. 135 The Applicants had not been headhunted. They had responded to advertisements placed in Fiji. They had completed a 5-page application found on line which meant that the Applicants would have had to refer to Cytech's website in order to procure it. Those application forms were forwarded to Cytech together with resumes supplied by both Applicants. Both Applicants had been interviewed by Cytech staff. They had signed and returned employment contracts to Cytech in Australia whilst they were still in Fiji. Presumably they would have had the opportunity to read through those employment contracts, and obtain advice as to their content, prior to doing so. At the very least, one would expect them to have read the employment contracts prior to uprooting themselves and their dependants to travel overseas to commence new employment. 136 However, I accept that the existence of an employment contract is not enough to establish that an employment relationship existed between the parties if the elements that go into the formation of the contract cannot be readily identified. 137 I accept that the Applicants had failed to establish that there was an express employment contract between them and the Respondent. The question remains, however, whether an employment contract can be implied from the relationship between the Applicants and the Respondent? I accept the submission made on behalf of the Respondent that it is still essential to find the elements of contract in an arrangement which is implied to exist. 138 Evidence was put before the Commission that Cytech was not a recruitment arm of the Respondent. It operated as a corporation providing services to health facilities other than the Respondent. It was in business to make a profit, operated at a profit and designed its labour supply contracts in such a way that a financial penalty was payable by its clients for late payment of invoices. It is obvious that its Board of Directors recognised the economic potential for such an enterprise with the recent popularity of 457 visas to fill demands in labour in the health services area. 139 I do not accept that DIAC would grant such visas to any firm willing to give the required undertakings without ensuring that such undertakings are genuine. The evidence before the Commission is to the effect that both regular and random inspections are conducted by DIAC to ensure compliance. It is obvious that there would be businesses willing to pay for a service whereby an Agency is prepared to take on the risks attached to the recruitment of overseas labour and the obligations attached to the 457 visas. 140 I do not accept that the type of training provided lends any weight to the argument that the Applicants were employees of the Respondent. On the evidence provided, the Respondent did not provide the Applicants with any vocational training. The Applicants were required to attend Occupational Health & Safety training and Duty of Care training compulsorily provided for direct employees of the Respondent in order to discharge the independent obligations the Respondent owed to service users, staff and visitors. 141 The Applicants had agreed to provide their services exclusively to Cytech, or at its direction, clients of Cytech during the 18 month duration of their contracts. The employment contract contained a restriction prohibiting the Applicants, without the prior consent of Cytech, working for any health service client of Cytech in the 12 months period following the end of the term of their employment. The Applicants consented to that prohibition, it would appear, without demur. 142 Cytech was obliged to provide the Applicants with work over the 18 months of their contract. Although it was not the practice to do so, Cytech had the ability under the contract to transfer either of the Applicants to work on a site of another client. 143 In spite of the fact that the Applicants were protected by insurances carried by its clients and through the membership of the Applicants with professional organisations, Cytech tendered evidence of three Certificates of Currency relating to the full amount of the employer's liability under the Workers Compensation Act 1987; public liability insurance; and Professional Indemnity insurance. 144 There was evidence before the Commission that, irrespective of how long the Applicants remained in Australia, whether for sufficient time to recoup the expenses incurred on their behalf or not, Cytech was required to provide a guarantee to DIAC that it would meet the cost of return travel for the employee and their dependants to their home country. 145 The payslips provided to both Applicants quite clearly depicted the client as being Uniting Care and the Employer as being Cytech. Those payslips reflected, in addition to the gross and net wages, penalty rates and PAYG tax instalments, the superannuation contributions deducted for payment into HESTA, deduction for health insurance, taxation deductions and year-to-date figures for annual, sick, long service and special leave. 146 The evidence indicated that the clients were not invoiced for time not worked. Therefore the clients were not required to pay for periods of sick leave or annual leave or leave without pay. 147 If the Commission was to find that the Respondent was the employer of both Applicants, DIAC would require it to lodge new visa applications on their behalf. 148 Unlike the Respondent's staff, the Applicants did not accrue long service leave. 149 The Respondent paid its staff an allowance in accordance with the Nursing Homes, Nurses &c., (State) Award. The Applicants did not receive any such allowance but were required to adhere to its dress code which was advised to them by Cytech prior to their arrival in Australia. 150 Ms Wilson gave evidence to the effect that the Respondent did not directly discipline staff supplied by Cytech for any performance or conduct deficiencies. 151 It is noted that the Respondent had arranged for the Applicants to be inoculated against Hepatitis B. 152 It is further noted that the Applicants were required to participate in performance appraisals conducted by the Respondent. A copy of Ms Kava's appraisal, dated 25 August 2006 noted that Ms Kava was directed by the Registered Nurse. Nevertheless, it is hard to imagine how anyone, other than a direct supervisor of the work, can conduct such appraisal. It is noted that Cytech required, and the Applicants did furnish, a completed a questionnaire on Cytech's services designed to reveal any problems encountered by its employees. 153 Having noted the totality of the evidence provided, the submissions of the parties and the authorities relied on by both parties, the conclusion is clear in that the employer obligations, complicated by the additional obligations imposed by the 457 visas, were borne by Cytech Intersearch. DECISION 154 The Applicants were not employees of Uniting Care Ageing NSW/ACT. 155 The Respondent had not, and could not, terminate the Applicants. The termination was conducted by Cytech Intersearch. 156 No contract can be inferred from the conduct of the Respondent and the Applicants. 157 Matters Nos. 3419 and 3421 are hereby concluded. I. 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