Department of Industrial Relations Rockhampton v Kiana Sail and Dive Pty Ltd [2005] QIRC 51 (2005) 179 QGIG 9

[Extract from Queensland Government Industrial Gazette, dated 6 May, 2005, Vol. 179, No.1, pages 9-12] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 278 – application for unpaid wages Department of Industrial Relations Rockhampton AND Kiana Sail and Dive Pty Ltd (No. W152 of 2004) COMMISSIONER BLADES 22 April 2005 Wages recovery application – Sail and dive adventure cruise over 3 days and 2 nights – On board caterer – Award free – Claim under Queensland Minimum Wage – Credibility of hours claimed – Contract of service or contract for services – Pieceworker – Claim found to lack credibility – Held employed on contract for services – Claim dismissed. DECISION This is an application brought by an Officer of the Department of Industrial Relations at Rockhampton being a duly appointed Inspector under the Industrial Relations Act 1999 (the Act) that the respondent Kiana Sail and Dive Pty Ltd (Kiana) pay wages and annual leave on behalf of a former employee Carly Therese Fisher in the sum of $3,026.29. The application is brought under the provisions of s. 278 of the Act. It is alleged in the application that Ms Fisher was employed as a Hostess/Caterer by the respondent on board its charter vessel Kiana which operates out of the Abel Point Marina, Airlie Beach conducting sail and dive adventure cruises to the Great Barrier Reef and Whitsunday Islands. It is alleged that Ms Fisher performed duties pertaining to guest liaison, cleaning, food preparation and production and general deckhand duties and was paid at the rate of $100 per day. It is alleged that she was employed for the period 21 February 2003 to 5 October 2003 and was engaged to work on trips undertaken from Friday to Sunday on a 3 day, 2 night basis in accordance with the respondent’s charter operations. It is alleged that there was no industrial instrument which was applicable during the period of employment. It is alleged that from 1 April 2003 to 5 October 2003, the Queensland Minimum Wage applied. The Queensland Minimum Wage for a 40 hour week was $431.40 as from the beginning of the first pay period after 1 April 2003. That rate was increased to $448.40 as from 1 September 2003. The application is made on the basis of the hours worked as supplied to the Inspector by Ms Fisher. Ms Fisher performed duties on board the Kiana during the trips of 3 days and 2 nights where the vessel usually carried 14 passengers and 3 crew. She claims she worked the following hours: Friday 7.45 a.m. to 9.00 p.m. Saturday 5.30 a.m. to 9.00 p.m. Sunday 5.30 a.m. to 5.30 p.m. Her claim is based on those continuous hours without a break. The respondent claims she was engaged as a caterer and not engaged for the hours claimed. The respondent alleges that reasonable hours to complete her allotted tasks would be 6 hours on the first day, 7-8 hours on the second day and 6 hours on the third day. It is alleged that Ms Fisher was never instructed what hours she was to work and that any other time at sea after completion of duty was at her leisure. I do not believe that Ms Fisher worked those hours without a break as she has claimed. In light of the other evidence, it is not probable. I find that the catering duties did not occupy the whole of the time claimed. This was a “sail and dive” vessel. Ms Fisher enjoyed diving. The Dive Log indicates that Ms Fisher enjoyed many hours of diving for which she gave no credit in her claims. She has asked this Commission to order the respondent to pay her for the time she spent diving. To justify this claim, she has alleged that she was employed to assist with diving and with the passengers and their safety. The respondent denies this claim and the Dive Instructor on board and in charge of diving operations denies the claim. But there were many instances where she and the Master of the vessel “buddied up” or she was “buddied up” with the Diving Instructor. If I understood her evidence correctly, she alleged that her mere presence in the water was of benefit to her employer as it encouraged the passengers to undertake paid diving. It is not a question of whether the exercise was of benefit to her employer. The question is, what was she paid to do? It may have been of some indirect benefit to the employer but that reason alone could not be said to attract a contractual recompense. There must be an agreement, an authorisation, express or implied to perform that work for recompense and I am unable to come to that conclusion on the balance of probabilities. The probabilities are that the diving was purely recreational. She was employed as the caterer. The Dive Instructor was charged with looking after the guests while they were in the water. Ms Fisher claimed she also did deckhand duties. The Diving Instructor, Mr Chatterton, gave evidence that he was the deckhand, otherwise he had nothing to do until diving time. That position is understandable and it is probable. I find that Ms Fisher was not required by the employer to do deckhand duties. If she did deckhand duties, it was voluntary, -- 1 of 4 -- 2 much like the diving, and not part of the terms of the contract, express or implied so as to enable her to claim a payment. She also sought recompense for duties she performed at the helm. She conceded it was not part of her official duty but denied doing it voluntarily. She conceded she had no experience in steering the vessel (or any vessel for that matter). She was not authorised to steer, of which fact I am satisfied on balance, and there was no contractual term express or implied which permitted her to claim payment for performing that task. In fact there was clearly a safety issue at any time she had control of the helm. On the whole of the evidence, I am satisfied that she was engaged as a caterer and that when those duties were completed she was entitled to do whatever she wanted, including diving. But the diving was not part of her duties and the employer could not be expected to pay her for the hours she spent underwater, even though there may have been some indirect benefit to the employer from the fact that she was in the water. The indirect benefit is quite unlike the benefit to the employer of a person who worked on Sundays as a barmaid in the case, cited by the applicant, of Australian Workers’ Union of Employees v Gullo 57 QGIG 58-59 where clearly there would be an implied obligation to pay. After taking into account her claims for the hours spent diving, for the hours she claims she worked as a deckhand and for the hours spent at the helm, I am satisfied that her hours claimed are grossly exaggerated. The difficulty I then have is with the hours she did work for the onus of proof rests upon the applicant on the balance of probabilities. While the employer has indicated that there were no set hours, Mrs Lambert, on behalf of the employer and who is one of the owners and who had had some experience as the caterer, has given an estimate of the hours required to perform her tasks. That evidence was supported by Mr Brent Chatterton, the Diving Instructor. He claimed that the job of caterer did not require more than 6 hours the first day, 8 hours the second day or 6 hours the third day, corroborating Mrs Lambert’s evidence. His credibility was attacked because his place of living coincided with the private address of the employer. He explained that he rented a Unit from them at that address. The relationship is noted but in my view, his evidence and that of the employer as to the estimate of the time required to perform the functions of caterer was more credible and reliable than the grossly exaggerated evidence of Ms Fisher. On a loose calculation and applying the Queensland Minimum Wage, Ms Fisher was paid for roughly 9 hours per day and I am unable to find on the probabilities, that there has been any underpayment. Any claim in these matters has to have as its foundation, credible and reliable evidence. The primary submission of the applicant involved the question whether Ms Fisher was an employee or a contractor and the foregoing analysis and findings have been made on the basis that Ms Fisher was an employee. But it is also appropriate to deal with the question whether she was in fact an employee. Ms Fisher’s partner was the Master of the Kiana. Because she believed she may not get paid for work unless she obtained an ABN (Australian Business Number), she did so. This belief probably arose because of the interaction between the owners and her partner but she obtained independent advice. There was no demand made by the employer for her to be engaged as a contractor but prior to her first trip (taken after the engagement of her partner) and at the time of her engagement, the employers accepted the engagement as a contractor when she submitted the ABN. It is significant that Ms Fisher had taken professional advice from an accountant before entering into this arrangement and, I am satisfied, contrary to her evidence, that she well knew that she was being engaged as a contractor rather than as an employee. There are taxation benefits to be gained from such arrangements. Of course, the provision of the ABN does not mean for that reason alone that the contract was a contract for services as opposed to a contract of service. The whole of the circumstances must be considered. The classification of whether a worker is an employee or an independent contractor is a difficult exercise and “leaves great scope for idiosyncratic exercises of discretionary evaluation of indicators” – per Munro J in an address to the Industrial Relations Society Annual Conference at Surfers Paradise July 2004. Deane J in Stevens v Brodribb Sawmilling Company Pty Ltd (1985- 1986) 160 C.L.R. 16 at p. 49 said: “The distinction between ‘employee’ and ‘independent contractor’ has become an increasingly amorphous one as the single test of the presence or absence of control has been submerged in a circumfluence of competing criteria and indicia.”. The control exercised over Ms Fisher, accepting the most favourable evidence to her, was that the food was provided by the employer and a menu incorporating a “daily routine” document was displayed on the galley wall. Beyond that she was left to her own devices. Ms Fisher did not supply any tools, the crockery and cutlery already being on board. There was no close supervision. There was also a T shirt supplied by the employer which advertised the employer’s business but which was not required to be worn on all occasions but which was usually donned when the Kiana was in port “to look professional”. There was no provision for sick pay, annual leave or superannuation payments and tax was not initially deducted. It seems to me that the relationship between her and the owners of the Kiana might very well be considered to be in the nature of employment except for two considerations. First, she was not paid a wage but paid for a specific task, that is, to cater for the passengers and crew while the vessel was at sea and secondly, and in these ambiguous circumstances more importantly, she intended the relationship to be that of an independent contractor. -- 2 of 4 -- 3 Her payment was $300 for the trip of 3 days and 2 nights. She was not paid by way of a periodic wage but by reference to the completion of the task – see Brodribb at p. 24; Abdalla, Abraham v Viewdaze Pty Ltd (A.I.R.C.) Print PR927971 where the Full Bench said at para 34, “Independent contractors tend to be paid by reference to completion of tasks” and in The Haggarty Group Pty Ltd v Wallace (2001) 166 QGIG 417, where Mr Wallace was to be paid at a flat rate of $18 per hour, Hall P said it suggested a contractor arrangement. See also WorkCover Queensland v J.M. Kelly (Project Builders) Pty Ltd (2003) 173 QGIG 589 where payment for time worked rather than to produce a result was indicative of an employee relationship. This was not a payment for time worked. When Ms Fisher approached the owners for the position, she was then in possession of an ABN after having taken independent professional advice from an Accountant. It mattered not to the owners whether they employed her or hired her as a contractor. They accepted the proposal she made. In Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v Bark Australia Pty Ltd (2001) 166 QGIG 255 at 256 a Full Bench of this Commission said: “As with any contract the intention of the parties is critical.”. Harker v Boon 1956 A.R. (NSW) 178 was referred to by that Full Bench. This case involved a question whether there was a farmer/share-farmer agreement or an employment agreement. Beattie J said at p. 183: “The problem is whether, in the light of all this evidence, it can be said that it was open to the magistrate to find that the relationship of employer and employee existed between Harker and Boon. The only evidence which supports the view that this relationship existed is the evidence that Boon worked on the farm under the supervision and control of Harker and at the times directed by Harker. Evidence of the fact that one person exercises a detailed, dominant and continuous control over the manner in which work is done by another is, of course, strong evidence that the relationship between the two persons is that of master and servant, but in every case the evidence must be looked at in its whole setting. The important matter is to determine whether the intention of the contracting parties was to establish the relationship of employer and employee, and the facts of a particular case, looked at as a whole, may well negative the conclusion that the exercise of control by one party over the work of another flows from the relationship of master and servant. It seems clear to me in the present case that both parties, initially at least, contemplated that the relationship which would exist between them would be that of owner and share-farmer, and it is clear, too, in my mind that at no time between March and August did Harker ever conceive the relationship between him and Boon to be other than that of owner and share-farmer. … I am unable to see that the evidence discloses a common intention that a relationship of employer and employee should come into existence.”. In Brodribb at page 37, Wilson and Dawson JJs said that the actual terms and terminology of the contract will always be of considerable importance. The decision of the High Court in Hollis v Vabu Pty Ltd did not change the law and what is required is a consideration of the totality of the relationship between the parties – Belcaro v Sheahan (2002) SAIRComm 29 and at para 25 – “The expressed intention of the parties is not determinative of the issue. It nevertheless remains an important factor and may, after a consideration of all relevant factors, be of considerable weight.”. Ms Fisher conceded that she assumed the employer would not hire her unless she was a contractor. The employer did not tell her that. What was in her mind was irrelevant for the nature of the agreement has to be examined objectively – Wallace (supra) at p. 418. In this case where there is some ambiguity as to whether this was a contract of service or for services, it seems to me that the intention of the parties becomes paramount. “The agreement itself then becomes the best material from which to gather the true legal relationship between them” – cited in AMP Society v Chaplin & Anor (1978) 18 ALR 385. I hold that Ms Fisher was a contractor. Queensland Police Union of Employees v Commissioner of Police 95 QGIG 194 was relied upon by the applicant to support the contention that Ms Fisher was on duty for the whole time she was at sea. It was the question whether a police officer was on duty the whole time he was on board the vessel or was he only to work if and when called on to perform duty somewhere at the Swain Reefs and then only if a Taiwanese vessel was sighted. He was held to have been on duty the whole time and entitled to overtime. While each case depends on its own facts and in that case an Award applied, such a conclusion could not be reached in this case unless it was first held that Ms Fisher was an employee. The answer to an employer’s dilemma in these circumstances is the independent contractor relationship specifying a payment for a given task. As Hall P said in Wallace, “given the penalty payments under the Award, it is scarcely likely that an employee would have been allowed such discretion.”. Conversely, it made good commercial sense to engage Ms Fisher as a contractor. This was no sham arrangement. In fact the previous caterers, BTS Catering, consisted of a -- 3 of 4 -- 4 father/son team and were engaged as independent contractors who, by the way, put together the menu as a guide for Mrs Lambert when she did the catering. There was a submission that s. 5 of the Act which defines an employee as “a person employed in a calling even though the person is working under a contract for labour only, or substantially for labour only” requires that Ms Fisher be treated as an employee. I thought this submission had been dealt with by his Honour the President in Wallace where he rejected the proposition that the definition deemed to be an “employee” someone who was not. In the event however that she was not a contractor, it is an attractive proposition that she was a pieceworker. No submissions were made but the possibility of such a finding was flagged during the hearing. Piecework is directed to a system of work in which workers are remunerated by reference to units of output or production and includes a system of payment by results – Trovas Holdings Pty Ltd v Ray White Carina and Gannon (1999) 162 QGIG 337. The Macquarie Concise Dictionary defines “piecework” as “work done and paid for by the piece” and “piece”, among its many meanings is “an amount of work forming a single job”. Ms Fisher was hired to bring about a result, to perform a single job, to cater for passengers and crew during a cruise of 3 days and 2 nights for which she was paid a fixed sum. A pieceworker is excluded from the operation of the Queensland Minimum Wage – Declaration of General Ruling (2003) 173 QGIG 1256. The application must fail and it is dismissed. B.J. BLADES, Commissioner. Hearing Details: 2005 31 March, 1 April (Proserpine) Written Submissions: 2005 8, 15 and 20 April Released: 22 April 2005 Appearances: Ms J. Diener for the Department of Industrial Relations Rockhampton. Mr J. Franken, Livingstones, with him Mr G. Lambert, for Kiana Sail and Dive Pty Ltd. Government Printer, Queensland The State of Queensland 2005. -- 4 of 4 --