Department of Industrial Relations Rockhampton v Kiana Sail and Dive Pty Ltd [2005] QIRC 52 (2005) 179 QGIG 12

[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. W153 of 2004) COMMISSIONER BLADES 22 April 2005 Wages recovery application – Master of “sail and dive” sailing vessel – Whether covered by an Award applying to “motor vessel” – Whether hired on a contract for service or contract of services – Whether an employee – Issues of credibility – Hours of work in claim grossly exaggerated – Held Award did not apply – Held to be a contractor – Held hours claimed not proved – Application dismissed. DECISION This application follows on from application W152 of 2004 between the Department of Industrial Relations and Kiana Sail and Dive Pty Ltd (Kiana) involving an employee Carly Fisher. In this case, an Officer of the Department sues the respondent Kiana on behalf of an alleged employee, Stephen James Marshall, Ms Fisher’s partner at the time, who it alleges, is owed $19,904.38 in wages, annual leave and notice. Mr and Mrs Lambert are the owners of the respondent company. Although the facts of the two cases were closely connected, Mr Marshall’s matter was heard separately from that of Ms Fisher and the evidence in this case is not the same as the evidence in the other. It is alleged that Mr Marshall was the Master of the vessel Kiana which operated out of Abel Point Marina, Airlie Beach conducting sail and dive adventure cruises to the Great Barrier Reef and the Whitsunday Islands area. It is alleged that he was paid at the rate of $190 per day. He was employed from 7 February 2003 to 5 October 2003 as a skipper on the Kiana on two trips per week which were each of 3 days and 2 nights duration departing at 8.30 a.m. on Mondays and Fridays and returning at 4.00 p.m. on Wednesdays and Sundays. Because of the itinerary, time constraints in terms of arrival at each destination, distance between each destination and the speed over ground of the vessel in prevailing wind conditions, he alleges that on a majority of occasions it was not possible to achieve the set itinerary by sailing alone. Consequently it was necessary to motor sail the vessel for most of the time. It is then alleged that his employment was subject to the Masters, Mates and Engineers’ Award, Motor Vessels 2500 B.H.P./1866kW.B.P. and Under – State (Excluding the Port of Brisbane) from 7 February 2003 to 27 April 2003 and from 28 April 2003 to the updated Masters, Mates and Engineers’ Award, Motor Vessels 2500 B.H.P./1866kW.B.P. and Under – State (Excluding the Port of Brisbane) 2003. ` Mr Marshall was Master of the vessel, was in command of it and, it is alleged, also performed duties which included pre-departure checks, motor sailing, watch keeping routines while at sea, mooring and anchoring, operations of ships tender, refuelling, pumping of bilges, engine room checks, coxswain, guest liaison, diving and snorkelling activities, deck watch, food preparation and cleaning. He holds the qualifications of Master Class 5/Skipper 3 and MED Grade 2 Motor. The Award mentioned above applies to “motor vessels”. It is alleged by the respondent that the Kiana is a sailing vessel equipped with a motor. The applicant alleges the vessel is a motor vessel. It is accepted by the parties that if the Commission determines that the vessel is a sailing vessel and not a motor vessel as described in the Award, then that is the end of the matter and the application must fail. If it be found that the Award does apply, then other matters arise, namely, whether Mr Marshall was a contractor or an employee and if he was an employee, what were the hours that he worked to fulfil his duties as Master of the vessel. Was the Kiana a “motor vessel” under the Award? I am satisfied on the balance of probabilities that the Kiana is a sailing vessel. It is obviously so from the photographs produced in evidence. A qualified Marine Surveyor and Ships Designer also gave an expert opinion that the vessel was a sailing vessel. Mr Lambert bought it as a sailing vessel and two Master Class 4 Skippers have said it was a sailing vessel. It is described as a schooner or a cutter – rigged ketch being rigged fore and aft, 16.46 metres in length with a breadth of 4.5 metres, drawing 2.9 metres with a lead ballast of approximately 5 tonnes in the keel. The main mast is approximately 20 metres high above the deck. Her hull material is steel. The vessel is equipped with a 111.15 KW Isuzu diesel engine which provides power to a shaft driven propeller. The evidence was that the Kiana was capable of 6 knots under motor and 9 knots or more under sail. The Certificate of Registration merely describes the vessel as a “passenger ship”. -- 1 of 6 -- 2 I am satisfied that the primary form of propulsion was intended to be under sail. The applicant relies upon the International Regulations for Prevention of Collisions at Sea adopted under the Commonwealth Navigation Act 1912 and which, by virtue of a Queensland Act are imported into State law, to prove that the vessel is a motor vessel. Those Regulations apply to all vessels upon the high seas and in all waters connected therewith navigable by seagoing vessels. The evidence is that the Kiana was not operated on the high seas but clearly enough, operates in waters “connected therewith”. In the Regulations, the term “power-driven vessel” means any vessel propelled by machinery. The term “sailing vessel” means any vessel under sail provided that propelling machinery, if fitted, is not being used. The Regulations regulate such things as look-out, safe speed, risk of collision, narrow channels etc and by their very title, indicate they are concerned with safety and the prevention of collisions. The definitions are prefixed by the sentence “For the purpose of these Rules ...”. They have no other purpose. They have no relevance to the interpretation of an Award specifying rates of pay and conditions of employment. There is no rule of construction of which I am aware that suggests that the meaning of a word as used in one Statute (and that word had to be the subject of definition to expose its meaning) should be transported across to another instrument dealing with an entirely different subject. The dictionary contains various definitions. The Macquarie Concise Dictionary says that a “motor vessel” is “a ship driven by internal combustion engines”. The Concise Oxford Dictionary has a “schooner” as a “fore and aft rigged vessel with two or more masts” and a “sail boat” as “propelled by sail”. A schooner or a sail boat is not a motor vessel. Another internet search gives a definition of a “sailing vessel” as “a vessel that is powered by the wind, often having several masts”. The question is whether the vessel which is clearly a sailing vessel, falls within the meaning of the term “motor vessel” as used in the Award. There is no legislation which defines a sailing vessel or a motor vessel and which is applicable in this case. The Award does not define “motor vessel”. Clause 1.3 of the Award provides: “This Award applies to Masters, Mates, Engineers, Principals-in-Charge and Launch Masters of motor vessels not over 2500 B.H.P./1866 KW.B.P. operating on the Coast of and in the Ports of Queensland (excluding the Port of Brisbane) and engaged in the excursion trade, passenger trade, cargo trade on towage of barges, lighters, punts or other floating material and who are not covered by any other award of this Commission.”. The applicant claims that the Kiana was propelled by its motor more than 50% of the time and therefore was a “motor vessel” under the Award. Reliance was placed on the case of The Australian Workers’ Union of Employees, Queensland v Story (1957) 42 QIG 726 where it was held that an employee was within that award only which represents his major and substantial operation. It is said that once a sailing vessel is being propelled by machinery either in combination with a sail or by machinery alone, the status and the characteristics of the vessel change. The applicant cannot prove that it was propelled by a motor more than 50% of the time on more occasions than it was propelled by the wind. It can only prove that it was propelled by its motor on most occasions more than 50% of the time when Mr Marshall was in command although there was no record of the actual hours under motor power kept. Moreover it’s method of propulsion depended on the whim of the Master (for the time being) who had exclusive control while the vessel was at sea. It was the Master’s decision whether to sail, motor-sail or motor, a decision which could depend on many things including the wind, tides, current, weather and even the destination (which the Master was entitled to change). Whether it was propelled by its motor more than 50% of the time is in my view, irrelevant. The vessel was designed to be propelled by the wind. So much is obvious. But if the Master (for the time being) elected to do something else, I believe it to be wholly inappropriate that he could, by that voluntary action, convert what was a “sailing vessel” into a “motor vessel” so that the owners could become guilty of an offence of breaching an Award provision (see s. 666 of the Industrial Relations Act 1999 (the Act) – maximum penalty $15,000) which suddenly became applicable because of the Master’s unilateral decision to over-use the motor. Implicit in the submission is that on one day, depending on the use of the motor, the Award applied, the next day if the motor was not used, it did not. The argument is that it is the use of the motor which brings this vessel within the meaning of the Award term. I think such a result to be most inappropriate, undesirable, inconsistent and repugnant and is an interpretation which is to be avoided. The Award uses the expression “motor vessel”. It was easy for the framers of the Award to use a wider expression if it was contemplated that sailing vessels using motor power were to be included. The Award appears to have been born about 1949. No case in which a “motor vessel” has been held to include a sailing vessel propelled by a motor has been brought to my attention. In my view, the Kiana is not a “motor vessel” covered by this Award. The respondent made reference to a proposed Award which has been filed in the Commission as founding a public interest argument that the employer association and the Unions accept that there is no appropriate Award coverage for employees for this Industry. I do not agree. I think the document could only be regarded as self-serving and attracts little weight. -- 2 of 6 -- 3 -- 3 of 6 -- 4 Was Mr Marshall a contractor? It is clear and I find that the respondents had no intention of hiring Mr Marshall as an employee. The owners were new to the Industry and they wanted a contractor and for good and obvious reasons. Any proposition where the employee could work unlimited hours of his own choosing at any time at penalty rates is unlikely and lacks commercial reality. Mr Marshall claimed for 12-14 hour days without a break where the respondent would be required to pay overtime at time and a-half and double time. If, because of a troublesome or sick passenger, the employee Master did not cease work at all, the burden on the owner could be significant. As Master, Mr Marshall was in charge 24 hours a day. There has been authority relied upon which suggests that an employee in Mr Marshall’s position may be entitled to 24 hours per day recompense at penalty rates – Queensland Police Union of Employees v Commissioner of Police 95 QGIG 194 where it was held that a police officer was on duty the whole time he was on board a vessel looking for Taiwanese vessels illegally fishing. While that case dealt with an employee and an Award provision, the evidence of the respondents that they insisted on a contract arrangement is entirely understandable and Mr Marshall accepts that he was told that if he did not like that arrangement, there was no contract at all. The employer said he wanted a particular job done for a fixed price so he engaged a contractor and I see more commercial merit in that rather than some inappropriate loose arrangement allowing uncontrolled and unsupervised activity at penalty rates. See The Haggarty Group Pty Ltd v Wallace (2001) 166 QGIG 417 where his Honour the President said “Given the penalty payments under the Award, it is scarcely likely that an employee would have been allowed such discretion” i.e. to work out for themselves how many hours a day they would work. There is a dispute in the evidence as to when Mr Marshall was told of the requirement to work as a contractor. He claimed that it was not until he went in to get his first payment after the initial trip. Yet he said in his written statement that when the offer was made, he was then unemployed. He also sent a letter to a Union on 9 October, four days after the termination where he alleged he had been employed on the basis he obtain an ABN. There was evidence of an invoice he submitted that shows “ABN pending” and dated before the first trip was undertaken. Although it has subsequently been claimed that the invoice was backdated, these apparent inconsistencies make the evidence of the respondents more acceptable that Mr Marshall was told of the contractor requirement at the first interview before he started work and I consider that the respondents’ evidence is the more probable. But the conflict in the evidence as to precisely when the arrangement was finalised is not that relevant because after the independent accountant’s advice on 20 February and Mr Marshall’s subsequent acceptance of the requirement to produce the ABN and to submit the invoices for payment to meet the demands of the employer that he work as contractor and not as an employee, the contract arrangement was then formalised and finalised and he well knew what he was doing. He accepted the only relationship that was offered to him – see Hall P in The Haggarty Group Pty Ltd v Wallace (supra). Mr Marshall admits he was never told he was an employee. Of course, the provision of the ABN and the supply of invoices from a docket book for payment do 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. Mr Marshall was not paid by way of a periodic wage but by reference to the completion of the task – see Stevens v Brodribb Sawmilling Co Pty Ltd (1985-1986) 160 C.L.R. 16 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 (supra) 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. I am satisfied that Mr Marshall accepted the arrangement, albeit reluctantly, but because he had no other job is no reason to say he was forced to agree. He had the choice of agreeing to the terms on offer or not. The independent professional advice from an accountant is of some weight. He eventually provided an ABN to the employer and was paid weekly upon presentation of invoices after each trip. 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.”. In Belcaro v Sheahan (2002) SAIRComm 29 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.”. Much was made about the control that was exercised by the Lamberts over his employment. Control has, in these circumstances, little relevance. While he was Master of the vessel, he had total control over the manner in which the work was to be performed. I would be surprised if an owner could not direct his contracted Master to take the boat, weather permitting, to certain advertised destinations. The advertising brochure advertised a “sail and dive” holiday to certain destinations but the ultimate decision as to whether the Master went to those destinations was his, depending on the weather. I would also be surprised if the owner could not forbid the Master from diving and leaving the vessel -- 4 of 6 -- 5 unattended by any authorised person. It is the degree of control which is relevant – Brodribb at 24 but in cases where the work involves a high degree of skill and expertise, absence of control may not be a strong indicator – Zuijs v Wirth Bros Pty Ltd (1995) 93 C.L.R. 561 at 571. In my view, the wearing of the T shirt at the wharf is also a matter which is neither here nor there. Mr Marshall’s evidence was inconclusive that he was actually required to wear the T shirt but the fact that it was given to him leaves the inference available that it was to be worn on some occasions. In a case where there is some ambiguity as to whether there 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. 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 Mr Marshall be treated as an employee. I thought this submission had been dealt with by his Honour the President in Wallace (supra) where he rejected the proposition that the definition deemed to be an “employee” someone who was not. On the whole of the evidence, I am satisfied on the probabilities that Mr Marshall intended to be bound and was bound as a contractor and should be classified in law as a contractor. The credibility of the claim itself. This is only relevant if the Award applied to Mr Marshall the employee. Mr Marshall was engaged to undertake sail and dive trips on the Kiana with, usually, 14 passengers and 3 crew. He has lodged a claim to be paid for 81½ hours per week. The hours claimed are: Monday 7.45 a.m. to 9.00 p.m. Tuesday 5.30 a.m. to 9.00 p.m. Wednesday 5.30 a.m. to 5.30 p.m. Thursday rostered off 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. There are significant issues of credibility regarding the evidence in support of this claim. Mr Marshall spent many hours diving during his trips to sea and the employer received a passenger complaint that the passengers were being left alone on deck while all crew were in the water diving. This resulted in a directive that the Master desist from diving. This instruction was not appreciated by Mr Marshall and the Diving Instructor, Brent Chatterton reported to the employer that Mr Marshall had sought to falsify the dive records so that Mr Marshall could partake of a dive. When Mr Lambert heard of this, he terminated the contract. Mr Marshall was understandably upset at the termination and said as he left “I’m going to get you”. Some four days later, Mr Marshall wrote to the Union claiming that he worked the hours (with some minor variations) that are recorded above. He made no deduction for the hours he undertook diving but in cross-examination explained that he worked much longer hours than claimed and the hours submitted were minimum hours only. The dive log exhibited in evidence reveals that the Master spent many hours diving and these dives must, I find, be recreational dives. There was evidence that diving by the crew was of some indirect benefit to the employer and also, that before the passenger complaint, Mr Lambert even encouraged it and sometimes even accompanied them on dives. But in my view, those circumstances do not take away from the recreational nature of the activity. To attract payment, there must be an agreement to pay, actual or implied and I am satisfied that in this case, Mr Marshall’s duty was as the Master. There was already a Dive Instructor employed on the vessel and it was his duty to look after diving guests. There was evidence that at times Mr Marshall was paired with his partner who happened to be the caterer on board. He conceded, reluctantly, that his claim included some periods of time when he was on a break. Mr Marshall claimed his duties included those of a deckhand. However, Mr Chatterton was the Dive Instructor on board and his duties comprised deckhand duties when diving was not taking place. Mr Marshall conceded that he voluntarily helped his partner to prepare meals and in explaining the evidence he gave of cleaning the bottom of the boat on the way back from dives, said he was not asked to do it. This claim was initially made to his Union at a time when Mr Marshall’s passion was aroused and was probably tainted by his feelings. He must have been still smarting from the termination. No record of hours worked was maintained and it is unlikely that the hours claimed are an honest attempt at estimation. -- 5 of 6 -- 6 Because I am satisfied that the claim is so grossly exaggerated and was made at a time so soon after a termination he considered to be wrong, I can have no confidence in what his real hours of work were. The onus of proof rests upon the applicant to prove the claim on the balance of probabilities and the evidence required to base any claim has to be both credible and reliable. I think the threats that were made taint the credibility of the evidence. For all of these reasons, the claim 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. -- 6 of 6 --