Brett Holt Plumbing Pty Ltd v Q-COMP Review Unit [2005] ICQ 9 (2005) 178 QGIG 255

[Extract from Queensland Government Industrial Gazette, dated 18 March, 2005, Vol. 178, No. 11, pages 255-256] INDUSTRIAL COURT OF QUEENSLAND Worker’s Compensation and Rehabilitation Act 2003 – s. 561 – appeal against decision of industrial magistrate Brett Holt Plumbing Pty Ltd AND Q-COMP Review Unit (Case No. C87 of 2004) PRESIDENT HALL 9 March 2005 DECISION On 4 March 2003 Mr Ross Henderson was injured while performing work as a drainer. On 13 October 2003 he lodged an application for workers’ compensation with WorkCover Queensland. On 31 October 2003, WorkCover advised Mr Henderson that his application was rejected on the basis that he was not a worker within the meaning of section 12 of the WorkCover Queensland Act 1996. Mr Henderson applied for a statutory review of the decision. On 17 November 2003 Q-COMP Review Unit set aside the decision of WorkCover stating, “The indicators are that at the time of the injury, you were employed by Brett Holt Plumbing Proprietary Limited under a contract for labour only, or substantially for labour only.”. The Review Unit concluded “… you are a worker under section 12 of the WorkCover Queensland Act 1996.”. The alleged employer, viz. Brett Holt Plumbing Pty Ltd, unsuccessfully appealed to the Industrial Magistrates Court. This is an appeal against the decision of the Industrial Magistrate. It is the effect of s. 603 of the Worker’s Compensation and Rehabilitation Act 2003 that the matter is to be dealt with under the WorkCover Queensland Act 1996. Both before the Industrial Magistrate and on the appeal it was common ground that Mr Henderson was not employed under a contract of service. The issue has always been whether Mr Henderson’s relationship with Brett Holt Plumbing Pty Ltd falls within s. 1 of Schedule 2 Part 1. An affirmative answer will bring Mr Henderson within the definition of “worker” as a “…person mentioned in Schedule 2, Part 1.”. See section 12(2). Schedule 2 is headed “Who is a Worker”. Part 1 is headed “Persons who are Workers”. Section 1 provides: “A person who works under a contract, or at piecework rates, for labour only or substantially for labour only.”. The Appellant relies upon Neale v Atlas Products (VIC) Pty Ltd (1955) 94 CLR419 and World Book (Australia)Pty Ltd v Commissioner of Taxation (1992) 27 NSWLR 377. The Industrial Magistrate accepted that viewed through the prism of those authorities Mr Henderson was not a worker. I entirely agree with the Industrial Magistrate. The evidence revealed that Mr Henderson was paid to produce a result (not to labour) and had the ability to delegate the entirety of the work to be carried out. The critical issue is whether Her Honour was correct in departing from decisions about s. 221A of the Income Tax Assessment Act 1936 which provides: “22IA.(1) ‘employee’ means a person who receives, or is entitled to receive, salary or wages… ‘employer’ means a person who pays or is liable to pay any salary or wages… ‘salary or wages’ means salary, wages, commission, bonuses or allowances paid…to an employee as such, and, without limiting the generality of the foregoing, includes…any payments made – (a) under a contract that is wholly or principally for the labour of the person to whom the payments are made… (2) For the purposes of the definition of ‘salary or wages’ in subsection (1) – (a) … (b) a payment made to a person under a contract that is wholly or principally for the labour of any person shall be taken to be a payment made under a contract that is wholly or principally for the labour of the person to whom the payment is made if – (i) in the case of a payment that is made in respect of labour that has been performed, in whole or in part, before the time when the payment is made – the whole or principal part of the labour that was performed before the time when the payment is made was performed before the time when the payment is made was performed by the person to whom the payment is made; and (ii) in the case of a payment that is made in respect of labour the whole of which is to be performed after the time when the payment is made – the person making the payment can reasonably be expected to believe that the person to whom the payment is made will perform the whole or principal part of the labour in respect of which the payment is made…”. There are obvious differences between that provision and Schedule 2, Part 1, s. 1. Whatever may be said of the provisions of the WorkCover Queensland Act 1996 dealing with actions for personal injury, the provisions about statutory benefits are plainly in the nature of beneficial legislation. Schedule 2, Part 1, s. 1 should be construed to give the fullest relief which a fair meaning of its language will allow without straining or exceeding the true significance of the provision; Townsville Trade Waste Pty Ltd v Commercial Union Assurance Company of Australia Ltd [2000] QD. R 682 at 684 to 685 per McMurdo P. -- 1 of 3 -- 2 In the era to which Neale v Atlas Products (VIC) Pty Ltd (1955) 94 CLR 419 and World Book (Australia) Pty Ltd v Commissioner of Taxation (1992) 27 NSWCLR 377 belong, the general proposition was that transactions were taxed only where clearly falling within the words of the statute compare Pearce and Geddes, Statutory Interpretation in Australia, 4th edition at paragraph 9. 25. Further, the explicit purpose of the scheme at s. 12 and Schedule 2 is to bring some persons within the definition of “worker” without regard to whether the characterisation is justified (Part 1), and to exclude other persons from the definition without regard to whether characterisation as a “worker” is truly justified (Part 2). Additionally, whereas one may readily grasp the notion of “payment made wholly or principally for the labour of the person to whom the payments are made” with which the fiscal cases were concerned, read literally Schedule 2, Part 1, s. 1 is a nonsense. A person cannot work under a contract “substantially for labour only”. A person may work under a contract for labour only. A person may work under a contract other than for labour only. A person working under a contract otherwise than for labour only may be paid principally for the labour expended. But a person cannot work under a contract “substantially for labour only” nor may a person be paid “substantially for labour only”. The adjectives “substantially” and “only” are antipathetic. Schedule 2, Part 1, s. 1 is the imperfect expression of an idea. It has to be read robustly lest the imperfections impede achievement of the section’s purpose. In all those circumstances the Industrial Magistrate was right not to brush onto Schedule 2, Part 1, s. 1 the authorities upon s. 221A of the Income Tax Assessment Act 1936. In the event the Industrial Magistrate relied on a passage in a decision of this Court, viz. WorkCover Queensland v J. M. Kelly Project Builders Pty Ltd (2003) 173 QGIG 589. The passage at 591 is: “The outstanding issue is whether Mr Fitzgerald was a person who was working under a contract for labour only or substantially for labour only. It seems to me that he was. It is immaterial that he provided his own tools. Section 1 of Schedule 2. Part 1 does not stop at bringing within the definition of ‘worker’ persons who work under a contract for labour only. It goes further ‘…so that the definition may apply not only where the remuneration is a return for manual labour… and for nothing else, but also where, although the remuneration is a return for something else also, the something else is comparatively so insignificant that in reality, or as one might say to all intents and purposes, it is the return for manual labour …’, Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 214 per Kitto, Taylor, Menzies and Owen JJ. See also Summit Homes v Lucev (1996) 16 WAR 566.”. It may be conceded that the issue raised on this appeal did not squarely arise in Kelly, ibid. In that case the putative worker was employed at an hourly rate and paid for the time worked. But the decision (after full argument) went beyond the material facts. Having regard to the nature and purpose of the statutory benefits regime, the scheme at s. 12 and Schedule 2 and the deficiencies in the language of Schedule 2, Part 1, s. 1, it seems to me that the second limb of the section is about the remuneration paid under a contract, not the nature of the contract, and is satisfied where in reality or “to all intents and purposes” the remuneration is in return for manual labour. If that be the test there is (and could not be) any suggestion that it was misapplied by the Industrial Magistrate. Some reference was made to The Workers’ Compensation Act 1916 as amended by The Workers’ Compensation Act Amendment Act of 1959, 8 Eliz 2, No 4. The Amendment Act of 1959 defined “Worker” as follows (emphasis added): “ ‘Worker’ – Any person (including any person in domestic employment) who has entered into or works under a contract of service of apprenticeship or otherwise with an employer, whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied or is oral or in writing: The term includes a person working under a contract or at piecework rates for labour only or substantially for labour only (including any such person who supplies his own tools of trade, being tools designed for use by hand) but does not include – (a) A person whose employment is of a casual nature, and is not for the purposes of the employer’s trade or business, unless he is specially insured under or is covered by a policy of accident insurance under this Act; or (b) A member of the Police Force; or (c) A member of the employer’s family dwelling in his house.”. There is some similarity of language, but the positioning within the principal Act is quite different to the positioning of Schedule 2, Part 1, s. 1. Additionally, an examination of the Parliamentary Debate on the Second Reading (12 March 1959) makes plain that the core of the amendment was the bracketed words. The Amendment was designed to exclude a person who provided the labour to operate an expensive item of machinery which the person brought to the contract. The provision (which has difficulties of its own) seems to me to be of no assistance. -- 2 of 3 -- 3 I dismiss the appeal. I reserve all questions about costs. Dated 9 March 2005. D.R. HALL, President. Appearances: Released: 9 March 2005 Mr K. Watson instructed by Chan Lawyers for the Appellant. Mr P. Rashleigh directly instructed for the Respondent. Government Printer, Queensland The State of Queensland 2005. -- 3 of 3 --