Doe v Sunlouvre Pty Ltd t/a Shutter Flex [2003] QIRC 239 (2004) 175 QGIG 114

114 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 16 January, 2004 QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Kayden Bruce Doe AND Sunlouvre Pty Ltd trading as Shutter Flex (No. B786 of 2003) DEPUTY PRESIDENT BLOOMFIELD 19 December 2003 Application for reinstatement – Applicant deemed to be subcontractor – Commission has no jurisdiction – Application dismissed – Application pursued without reasonable cause – Costs awarded. REASONS FOR DECISION In proceedings on 16 December 2003, I responded positively to a submission by the advocate for the respondent that the Commission had no jurisdiction to entertain an application for reinstatement lodged by Mr Kayden Bruce Doe and to an application that I should dismiss the matter in the public interest pursuant to the provisions of s. 331(b) of the Industrial Relations Act 1999 (the Act). In doing so I indicated I would publish reasons for my decisions in the near future. I also indicated I would award costs in an amount to be determined after I received advice from the respondent’s advocate and solicitor about the costs incurred by the respondent in its defence of the application. I now record my reasons for the decision given on 16 December 2003 and quantify the costs I have decided to award pursuant to the provisions of s. 335 of the Act. The applicant’s contentions The applicant contends he commenced employment with the respondent on or around 18 February 2002 under an arrangement which provided for an hourly rate of wage, a site allowance and a daily travel allowance with work on Saturdays to be paid at time and a-half. He said the respondent unilaterally altered the contract on or around 25 March 2002 to increase the hourly rate and to remove the previous site and travel allowances, with weekend work still to be paid at time and a-half. The applicant said that in the week ending 25 August 2002 he was approached by Mr Dirk Huenerberg, the respondent’s Managing Director, and informed that the contract was to be changed such that the applicant was to supply his own vehicle and tools and was to install the respondent’s shutters at a fixed price per metre. The applicant said he was told he would receive $50.00 per job but would not receive any additional rates for weekend work. The applicant contended he was dismissed on 16 April 2003 following an argument about payment of the $50.00 per job allowance mentioned above. The applicant rejected the respondent’s contentions he was, at all times, a subcontractor to the respondent. He claimed he was under a contract of service and cited a number of indicia which allegedly supported his contention, as follows: “a. I worked solely for the respondent. b. I do not put in an invoice at the end of each job. c. I am paid fortnightly regardless of completion of jobs. d. I have set working hours. e. I have no control over what jobs I do. f. I have no control over how a job is done. g. I have no control in which order I do any jobs. h. I have no control over what time I do any jobs. i. I have no superannuation plan. j. I do not supply any materials. k. I did not have the right to employ staff or delegate work as an offsider was supplied to me by the respondent. l. And it was not my intention to be engaged as a contractor. I was offered a job to work for shutter flex and I took the job.”. In his statement in reply to the respondent’s witness statements the applicant restated some of the above indicia and added several new ones as follows (repetitions omitted): “v. The applicant was not liable for rectifying defects in his work or for resulting damage. vi. A copy of tax invoice 00003 dated 24/02/02 is attached. [As evidence of the initial hourly rate, site allowance and travel allowance arrangement]. vii. The respondent controlled the time jobs were done. viii. The respondent controlled the way jobs were done. ix. The respondent controlled who the applicant worked with. x. The respondent controlled the day jobs were done. xi. The applicant was to work solely for the respondent (see subcontract agreement page 2 paragraph 2 dated 19/11/03 (sic). ‘If holidays required throughout the year 4 weeks notice is required and a total of 4 weeks per year could be taken, including time off at Christmas (approx 2 weeks). xii. The applicant was at times paid on an hourly basis indicative of an employer/employee basis. ... xiv. The applicant did not supply materials. xv. The applicant did not pay into a superannuation fund. xvi. The applicant did not charge or pay GST. ... xviii. The applicant was required to start work at 7 o’clock every morning unless otherwise ordered by the respondents. xix. The applicant was paid 2 hours at the appropriate hourly rate per day per job.”. Analysis of the applicant’s evidence The applicant’s responses to questions put to him by the advocate for the respondent painted a very different picture to that alleged above. I refer to a number of examples. -- 1 of 3 -- 16 January, 2004 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 115 In direct contrast with his assertion it was not his intention to be engaged as a contractor, Mr Doe agreed he had made application for an ABN number at least a week prior to entering into “employment” with the respondent in February 2002. He also indicated he had researched the procedure involved in making such application by accessing the Australian Taxation Office (ATO) web site before completing the necessary application. Further, he indicated that he was aware right from that time that an ABN number could not be obtained by an employee and he understood he was entering into a subcontractor arrangement with the respondent. The applicant also agreed that from the commencement of the arrangement between he and the respondent he had provided what was described as a “Tax Invoice” which included his ABN number. When asked why and how he had drawn up a tax invoice to give to the respondent the applicant advised he had copied the format from a friend of his who also worked as a subcontractor for another firm. To further belie his assertion it was not his intention to be engaged as a contractor, the applicant told the Commission he had established from the ATO web site, and through discussions with a friend, that he did not need to charge GST on tax invoices for the respondent if his earnings were to be less than $50,000 per annum. When questioned about what he would do if his earnings were approaching that amount the applicant indicated he would cease work so as to ensure his earnings would not exceed the ATO limit (and obviate the need to account for or pay GST). When asked about his taxation arrangements and the nature of his taxation return, the applicant advised his tax return recorded him as being “self- employed”. He also said he depreciated the utility and wrote off (as allowed by tax laws) any tools and equipment which cost less than $1,000. He also advised he claimed the cost of repairs to the motor vehicle and the cost of his mobile phone. In contrast to his assertion he did not have the right to employ staff or delegate work because an offsider was supplied, the applicant agreed under cross- examination he had been invited to engage his own offsider when the contract arrangements were altered in September 2002, and to receive a higher installation rate, but said he declined that invitation. [In that respect, it should be recorded the respondent had introduced a requirement, based upon occupational health and safety factors, that none of its contractors was to work alone because of the risks associated with allowing an individual person to lift, hold or attempt to position its shutters. As a consequence, its standard subcontract agreement gave contractors the choice of engaging their own offsiders or being able to call upon one provided by the respondent whenever one was needed.]. In contrast to the applicant’s assertion he did not supply tools or a vehicle, he agreed he had purchased a utility from the respondent when the new contract was entered into in September 2002 and from that time onwards supplied his own vehicle and tools. This included such equipment as a drop- down saw and a number of drills and other hand tools which were necessary for the applicant to install the respondent’s shutters. In contrast to his assertions about the degree of control that the respondent allegedly had over the time at which and the method by which he performed his duties, the applicant’s evidence confirmed the only control which the respondent exercised was to allocate particular jobs in the order in which it wished them to be performed on any given day. The applicant agreed this was because particular jobs had been booked with clients at certain approximate times of the day and it was necessary to install shutters in the pre-booked order to keep faith with the clients. The applicant also agreed that shutters had to be installed in accordance with building regulations and design standards and further agreed that if the respondent specified the type of fittings to be used, or how a shutter might need to be installed in certain situations, it was because of the need to meet these requirements. The applicant’s status Irrespective of what the nature of the arrangement might have been between February 2002 and September 2002, it is clear the arrangement which existed between the applicant and the respondent from on or around 17 September 2002 was one of contractor and subcontractor. The written agreement is evidence the parties intended for that to be the nature of their arrangement and nothing about the way they conducted their relationship suggests it was anything different to that which was intended. It is also clear from the terms of the agreement and the applicant’s evidence under cross-examination (in contrast to his statement of evidence and statement in reply) that the way the applicant performed his duties were typical of a subcontractor, rather than an employee. For example, the applicant was responsible for the provision of his own vehicle and equipment. He was also responsible, at the discretion of the respondent, for the rectification of any damage or problems with an installation which might have arisen from his action or inaction. The applicant also provided a tax invoice to the respondent in which he claimed payment for work performed. Whilst it is true the payment to the applicant included a flat amount per job the evidence suggests this payment was to compensate the applicant for firstly, the time spent in collecting shutters from the respondent’s factory and, secondly, for using his own vehicle to transport the shutters to site. Importantly, however, the applicant was not paid for the time spent on an installation. He was paid a certain agreed amount per metre of installation. This meant the applicant bore the risks associated with the installation. If the installation was simple, and the job was completed in a relatively short time, the applicant stood to “profit” from the exercise. If the installation was more difficult, or there was some unexpected problem, the applicant stood to “lose” from the exercise. Clearly, the applicant was working on his own account and stood to lose or gain depending on the nature of the installation. The arrangement between the parties was not based upon the time involved. It was strictly a per metre rate. Whilst it is not absolutely decisive, the Applicant’s behaviour, right from the outset, demonstrated he thought he was a contractor and, in that sense, was self-employed. In this regard, I cite his evidence about how he went about applying for the ABN number, the provision of tax invoices, the way he completed his taxation returns, and so on. Quite apart from the above indicia, which all point to the arrangement being one of contractor and subcontractor, the applicant gave evidence he did not intend to work for the respondent (or any other person) once his earnings reached the magic $50,000 per annum the applicant believed would keep him out of the GST net. If there was ever any doubt the applicant was an employee or contractor his evidence on that point completely removed it and left only one possibility, i.e. he was a contractor free to choose when to work and when not to. For the foregoing reasons, I concluded Mr Doe was, at least from 17 September 2002, a subcontractor to the respondent. As such, the Commission had no jurisdiction to entertain his claim and I acted to dismiss it both for want of jurisdiction and because further continuation of the matter was not necessary or desirable in the public interest. Costs This was not a case of a well intentioned, poorly advised, applicant who was unable to properly present his case. -- 2 of 3 -- 116 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 16 January, 2004 It was a case of a person who had visited his solicitor (on his evidence) on 6 or 7 occasions in the lead up to the proceedings, who had consulted his solicitor on his outline of argument and the nature of his arrangement, and who had decided to press on with the application for reinstatement regardless of the consequences. The applicant simply ignored the realities of the relationship between he and the respondent and tried to put his own gloss on the various indicia in an attempt to paint the true nature of the relationship in a different colour. In that respect, he blithely ignored the obvious and attempted to substitute his view of the facts – however far from the reality they truly were. In my view, the applicant was simply on some sort of an adventure (or crusade). He had decided to give the matter a try and was not concerned about the consequences if he did not succeed. He thought he was invulnerable. He had no concern or regard, whatsoever, for the expense he was putting the other side to. He adopted a cavalier approach to the whole matter as evidenced by the way he prepared his witness statements, his general demeanour, and the way he responded to questions. In addition, the applicant made it clear by his evidence that he was not seeking reinstatement to his former position, even if he was successful in his application. He confirmed he had rejected offers for payment of disputed invoices and had rejected offers of on-going work. One is entitled to wonder why the application was even lodged. The total lack of merit in the applicant’s case, and the way that he went about presenting it, causes me to conclude that this was the most deserving case for costs I have seen for some time. The applicant should never have pursued his application in the first place, let alone from the time he was offered payment for the disputed invoices and offered further work by the respondent. In my view, Mr Doe pursued the matter without reasonable cause and/or committed an unreasonable act connected with the conduct of the application by continuing to pursue the application when he should have known it had no chance of success. Since making my decision on Monday, 16 December 2003 to dismiss the matter and award costs, I have had the opportunity to read the Certificate (issued pursuant to s. 75) provided to the applicant following the conciliation conference before another Member of the Commission on 26 May 2003. The Certificate could not have been any clearer to the applicant than it was. It warned him he was probably not an employee and it also warned him he was at grave risk of having costs awarded against him if he pressed ahead with his application and it was found wanting. The respondent incurred costs totalling $9,145.95 from the time of the call-over until dismissal of the application. That amount includes costs for a solicitor to attend the arbitration in the amount of $585.00. Given the respondent was represented by an advocate there was, strictly, no need for a solicitor to be in attendance. That leaves costs of $8,560.95 to be considered. After considering the whole of the statement of costs, and various scales within the Magistrates Court and elsewhere, I have decided to award costs of $5,000.00 in this matter pursuant to the provisions of s. 335 of the Act because the applicant pursued the application without reasonable cause and/or he caused costs to be incurred by the other party because of an unreasonable act or omission connected with his conduct of the application. The Commission orders Kayden Bruce Doe (the applicant) to pay Sunlouvre Pty Ltd trading as Shutter Flex (the respondent) costs of $5,000.00 within 22 days of the date of release of this decision. I also formally confirm that application B786 of 2003 is dismissed because Mr Doe was not an employee at the time of his dismissal and was not entitled to access the jurisdiction. The Commission determines and orders accordingly. A.L. BLOOMFIELD, Deputy President. Hearing Details 2003 17 November Appearances: Mr K. Doe, Applicant. Mr J. Lawson, of John F. Lawson and Associates Pty Ltd, with him Mr M. Moy, of McCullough Robertson, for the Respondent. 16 December -- 3 of 3 --