Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v Soutar [2002] QIRC 121 (2002) 170 QGIG 455

16 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 455 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 278 – unpaid wages Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees AND Ralph Soutar (Nos. W15, W16 and W17 of 2002) COMMISSIONER ASBURY 5 August 2002 Industrial Relations Act 1999 s. 278 – Underpayment of wages – Hearing in absence of respondent – Central issue whether claimants were employees or independent contractors – Status of unsworn statements received from respondent – No weight to be placed on statements from respondent in light of failure to attend hearing – Consideration of requirement for Commission to perform functions in a way that avoids unnecessary technicalities – Provisions do not extend to admission into evidence of unsworn statements in the absence of respondent – Consideration of whether claimants were employees or independent contractors – Consideration of tests established in case law as to whether relationship is one of employment or independent contract – Application of tests established in case law to facts establishes relationship of employment – Applications granted. DECISION Overview On 31 January 2002, the Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees (the ALHMWU) made applications on behalf of David Alexander Cole (W15 of 2002); Adam James Kemp (W16 of 2002) and Kenneth James Chancellor (W17 of 2002) seeking in each case, orders for payment of unpaid wages, under s. 278 of the Industrial Relations Act 1999 (the Act). The orders are sought against Ralph Soutar trading as Efficent Reliable Security (the respondent). The applications in each case state that the wages are payable under the terms of the Security Industry (Contractors) Award – State, and that each of the persons on behalf of whom the applications are made (the claimants), was employed under that Award. The applications were heard concurrently. The amounts claimed in each of the applications are as follows: • David Alexander Cole (W15 of 2002) – $10,689.26; • Adam James Kemp (W16 of 2002) – $2,230.09 (following leave to amend amount claimed to reduce it from $8,882.50); and • Kenneth James Chancellor (W17 of 2002) – $10,689.26. A copy of a Queensland Business Names Extract for Organisation Number BN7093690 tendered by the ALHMWU (Exhibit A4) names Ralph John Soutar and Beverley Myrtle Soutar as persons carrying on the business Efficent Reliable Security, and provides a Strathpine address as the principle place of business. The applications were heard on 24 April 2002. The applications were re-listed for further hearing on 19 July 2002, when the Commission became aware that documentation provided to the claimants by the respondent contained reference to ERS Guards Patrols ABN 70 406 659 926. In response to a question from the Commission, Mr Crank for the applicant advised that the order was sought against Efficent Reliable Security BN7093690, as the ALHMWU believed that ABN 70 406 659 926 related to the same entity. Hearing in the absence of the Respondent The ALHMWU filed an affidavit of service, deposing to the service of the applications upon the respondent at a post office box address in Dalby. It is apparent from documentation on the file that previous attempts by both the ALHMWU and the Industrial Registrar to correspond with the respondent at the registered business address for Efficent Reliable Security, have been unsuccessful. However, correspondence was received by the Industrial Registrar from the respondent on 28 March 2002 attaching “brief” statements in relation to each application, and advising that more detailed statements would be provided after consultation with a solicitor, “in the next week.”. The applications had been listed for hearing on 2 April, following a directions hearing on 20 February 2002. The respondent did not appear at either hearing. However, given correspondence from the respondent referred to above, the matter was adjourned with the agreement of the ALHMWU, to 24 April 2002, to ensure that the respondent was given every opportunity to appear and defend the applications. The respondent failed to appear at the hearing on 24 April 2002, and the matter was dealt with in the respondent’s absence, pursuant to Rule 62 of the Industrial Relations (Tribunals) Rules 2000. In relation to Rule 62(a) each of the applications contained a warning in bold typeface that failure by the respondent to attend the hearing may result in a decision being given against the respondent without further reference. A similar warning was contained in two directions orders issued in the proceedings, one of which was covering the application as served on the respondent. In relation to Rule 62(b) the ALHMWU provided service on the respondent and deposed to that service at a post office box address in Dalby, by way of an affidavit of service which I have previously referred to. That post office box address in Dalby is the same address as appears on correspondence covering the unsworn statements forwarded to the Industrial Registrar by the respondent. I am also of the view that the application in each case, contains sufficient particulars relied on in support of the application. Each application contains detailed calculations of the wages said to be underpaid, and a statement of material facts setting out the case against the respondent in summary form. The Issues for Determination An application for unpaid wages under s. 278 of the Act, may be made in respect of an employee, an apprentice, a trainee or an eligible employee (in respect of superannuation contributions). In each case, the applications state that the persons on whose behalf the claims are made, are not apprentices or trainees. Further, none of the applications seeks payment of superannuation contributions. -- 1 of 7 -- 456 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 16 August, 2002 In determining the claims for unpaid wages, the first arising is whether each of the persons on whose behalf the applications are made, was an employee for the entire period covered by the claims. This issue arises because the evidence called by the ALHMWU is that two of the claimants, Mr Cole and Mr Chancellor, were told by Mr Soutar, when they commenced to perform work for the respondent, that they were independent contractors. Further, the evidence is that both Mr Cole and Mr Chancellor were told by Mr Soutar that upon the introduction of the Goods and Services Tax (GST) in mid 2002, they would become employees. Evidence called by the ALHMWU Evidence was put before the Commission by the ALHMWU in the form of affidavits from each of the claimants. Mr Chancellor and Mr Kemp were available at the Commission on the day of the hearing into the applications and gave evidence. Mr Cole was not available. The affidavits of Mr Cole and Mr Chancellor stated that when they commenced to work for the respondent, they were told that they were sub-contractors, and would be paid at a flat hourly rate. Further, Mr Cole and Mr Chancellor were told that they would be required to invoice the respondent for hours worked, and that they would be responsible for their own tax. In the case of Mr Cole the flat hourly rate was initially $12.00 per hour, with an increase to $12.50 per hour in November 1999. Mr Chancellor commenced with an hourly rate of $12.50 per hour. Mr Kemp, on the other hand, stated in his affidavit that he had been told by Mrs Soutar that he was a casual employee, and later that he was a permanent part-time employee. Mr Kemp said that he had never received paid holidays, penalty payments, allowances or overtime payments. Mr Kemp said that he had been paid an hourly rate of $12.50 per hour for all hours worked. Mr Kemp also said that he had worked on nights, weekends and public holidays and had been paid at the rate of $12.50 per hour for all time worked. The affidavits contained the following common details: • No document or contract concerning the terms of work for the respondent had been signed; • Time sheets for every day on which work was performed were required to be completed; • Detailed instructions on how to do the job had been given on a daily basis by Mr Soutar; and • Weekly roster times when work was required to be performed were provided by the respondent, and in each case, were attached to the affidavits. Evidence of Mr Cole Mr Cole stated in his affidavit that he had been employed by the respondent from January 1999, until March 2001. Mr Cole said that Mr Soutar did not ask him if he agreed to be a sub-contractor, but simply told him that if he wanted to work for him then “being a sub-contractor is the way it works.”. Further, Mr Cole said that “Bev Soutar” who had performed most of the administration work for the respondent had told him that he was required to apply for an Australian Business Number to be able to submit invoices. Mr Cole had complied with this request, but had not advertised his services or printed business cards. Mr Cole also said that he could not make any profit or loss because he had no expenses related to his job apart from union membership and the minor things he was required to supply. Mr Cole had performed duties, mostly at Westfield Strathpine Shopping Centre, including internal and external patrols; locking and unlocking of doors at opening and closing times; removing persons who were disturbing the peace from premises; securing shops which were being refitted and writing reports to police about shop-lifting, fighting and other criminal acts on-site. Mr Cole also said that he provided his own torches, baton, radio ear-pieces and radio belt clip. Mr Soutar provided Mr Cole with shirts bearing the ERS and Westfield logos; radio; mobile phone; loudspeaker; mops and buckets and cards for placing in doors which he had checked. Mr Cole said in his affidavit that he had used his vehicle for mobile patrols and on occasion had also used Mr Soutar’s vehicle. Further, Mr Cole said that he had not arranged any superannuation or insurance for himself and believed that he would have been covered by WorkCover if he was injured at work. During the time he had worked for ERS, Mr Cole said that he had not worked for anyone else or received any other income, with the exception of a second job he had held with Playtime within Westfield Strathpine for about six months, involving the working of one or two shifts each week. Mr Cole said that he had not delegated his work to anyone else and did not believe that he could do so. On occasions when Mr Cole was sick, he had telephoned the respondent, and the respondent had arranged a replacement guard. Further, when Mr Cole had been unable to attend work, his hours in the following week had been reduced to the minimum of sixteen in the following week. At some time in mid 2000, Mr Cole said that he had attended a function at the home of Mr Soutar with other guards. Mr Soutar had advised the attendees at the function that now that “GST” was in, they would be employees, and tax would be deducted from their pay. Thereafter, Mr Cole received payslips from the Respondent each fortnight, and these were attached to his affidavit. Evidence of Mr Kemp Mr Kemp stated in his affidavit that he was employed by the respondent from 26 June 2000 until 1 March 2001. Mr Kemp had secured his employment through Mr Cole, who he was living with at the time. Mr Kemp’s duties in addition to those outlined in the affidavit of Mr Cole, had also included crowd control at movie marathons; monitoring closed circuit television and collecting and delivering cash to a bank. While Mr Kemp had signed time sheets as required by the respondent on each day he had worked he had copied the starting and finishing times onto a spread sheet for an ALHMWU official. The time sheets were not attached to Mr Kemp’s affidavit, but rosters which he said showed the times he had been required to work were attached to his affidavit. Mr Kemp said that as he started working for the respondent around the time of the introduction of the “GST” he had gone straight on to wages and had not been told at any time that he was an independent contractor. Mr Kemp had been provided with a document by the respondent, entitled “PAGY Summary – Individual Non Business” indicating that tax had been withheld and the gross amount paid to him, for the year ending 30 June 2001. This document was attached to Mr Kemp’s Affidavit (Exhibit A2). Evidence of Mr Chancellor Mr Chancellor said that in the earlier part of the time he had worked for the respondent, he had been told that he was a sub-contractor, and was required to submit invoices to be paid. Mr Chancellor also said that if he could not work a shift, he was not responsible for finding a replacement to do the work. Rather, Mr Chancellor had been required to advise the respondent, and the respondent had arranged a replacement guard to work the shift. Invoices submitted by Mr Chancellor were attached to his affidavit. The invoices are headed F.A.T.S. and are typed and numbered. The time sheets submitted by Mr Chancellor which were also attached to his affidavit are designated “Ken – F.A.T.S.”. -- 2 of 7 -- 16 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 457 In his evidence, Mr Chancellor said that F.A.T.S. was a business that he had conducted prior to supposedly contracting his services to Mr Soutar. F.A.T.S. was a registered business name, derived from the abbreviation of Fire Associated Training Services. During the period when he had invoiced the respondent, Mr Chancellor said that he had paid his own tax. Mr Chancellor said that his business known as F.A.T.S. had conducted fire training, but had not been very profitable, due to loss of contracts. The business had last provided service to a client in the area of fire training, at the end of November 2000. Mr Chancellor agreed that in about July 2000, he had been told by Mr Soutar that he would start to be paid as an employee instead of an independent contractor. Submissions of the ALHMWU Mr Crank for the ALHMWU, submitted that the evidence before the Commission clearly established that the claimants were at all times, employees of the respondent. Mr Cole and Mr Chancellor had been referred to by the respondent as contractors in the early part of their work, but were subsequently referred to as employees due to the introduction of the GST. Mr Kemp was always treated as an employee by the respondent and had received a group certificate for the entire period of his employment. It was submitted that none of the claimants had agreed to become sub-contractors and did not sign any contract to this effect. Further, it was not the intention of any of the claimants to become sub-contractors, although they were aware that the respondent referred to them as such. Mr Crank cited Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 in support of the proposition that the right to exercise control is an important factor in determining whether a person is an employee or a sub-contractor. It was submitted that the evidence of the claimants indicated that the respondent exercised the right to control by directing the claimants with respect to the manner in which their work would be performed. Mr Crank also cited Hollis v Vabu Pty Ltd [2001] HCA 44 as authority for the proposition that the imposition of work practices by the principal indicates an employment relationship. Further, Mr Crank pointed to the following factors considered in Hollis v Vabu to be indicia of an employment relationship between the bicycle couriers subject of that case, and Vabu Pty Ltd: • they (the bicycle couriers) were not supplying skilled labour; • they had little control over the manner of performance of their work; • they were required to be at work at a certain time and to work in accordance with a roster; • they were presented to the public and those using the courier service as emanations of Vabu; • they were required to wear uniforms bearing Vabu’s logo and were subject to dress and appearance requirements imposed by Vabu; and • there was no scope for them to bargain with respect to their rate of remuneration. It was contended by Mr Crank that the evidence in this case, disclosed the existence of the same factors. The claimants were security guards and were not supplying skilled labour. They had little control over the manner of the performance of their work, and were subject to daily direction by the respondent as to the duties to be performed and the timing of their performance. The evidence of the claimants also indicated that they were subject to a roster, and were required to work in accordance with that roster, at sites designated by the respondent. Mr Crank said that the claimants wore uniforms displaying the respondent’s logo, and it was clear that they were presented to the public and the clients of the respondent as emanations of the respondent. The evidence also disclosed that there was no capacity for the claimants to bargain with respect to their rate of remuneration, as it was set and adjusted by the respondent. It was also submitted by Mr Crank that the respondent would arrange replacement guards in the event of the inability of one of the claimants to work on a particular day. The items provided by the claimants were said to be of lesser value to the bicycles supplied by the couriers in Vabu and conversely, the items supplied by the respondent in this case, were said to be of greater value than those supplied by Vabu in that case. The entire business of the respondent in this case was the provision of security services, and this was the work carried out by the claimants. The fact that no payments were made for annual leave, sick leave and superannuation, was not determinative of the claimant’s being found to be contractors. The claimants had no other source of income during the period they were working for the respondent, other than in the case of Mr Cole who had a second job, as an employee, during six months of the time he was performing work for the respondent. Further, Mr Crank submitted that none of the claimants had arranged any form of superannuation or insurance, as would be expected of independent contractors. None of the claimants had made a profit or loss working for the respondent, and had taken no risks beyond those which a casual employee would take. Statements Received from the Respondent As previously stated, statements purporting to be made by Mr Soutar on behalf of the respondent, were received by the Industrial Registrar on 28 March 2002. The statements were not made under oath and were not in affidavit form. It is also far from clear whether the statements were provided to the ALHMWU. It appears to be the contention for the respondent, that Mr Cole, Mr Kemp and Mr Chancellor were told that the respondent only had casual work and that the hourly rate would be $12.50. Further, it appears that the respondent contends that Mr Cole, Mr Kemp and Mr Chancellor were also told that they would be sub-contractors, responsible for their own tax. The following paragraph appears in each of the three statements: “In the advent of GST I spoke with our accountant and he told me that I would need to put everyone on to wages as by the year 2002 we would not be able to sub-contract. I advised all of my staff of this. But also told them, as they were aware of our $16.50 per hour contract with Westfield I still would only be able to pay the $12.50 per hour flat rate they all agreed. I also told them at the same meeting that our contract was due the following February and that we would definitely quote much higher and then we would be able to pay penalty’s exc. (sic) They agreed.”. The Commission is not strictly bound by the rules of evidence, but rather must perform its functions in a way that furthers the objects of the Act and avoids unnecessary technicalities and facilitates the conduct of proceedings (s. 173(2)). However, I think that it would stretch the limits of this provision to accept unsworn statements as evidence in proceedings, when the person who purportedly made the statement is not available to be cross-examined or to even give evidence as to the correctness or veracity of the statement. I am also of the view that such an approach could not properly be taken using any of the powers incidental to the exercise of jurisdiction under s. 329 of the Act. Accordingly, I do not propose to place any weight on the statements forwarded to the Industrial Registrar on 28 March 2002, purporting to be made on behalf of the respondent. In putting no weight on the statements, I also consider that any disadvantage to the respondent is neutralised by the fact that the statements prima facie are corroborative of the claimants’ versions of events in several significant areas, and may have assisted their cases. The High Court Decision in Hollis v Vabu The central issue considered by the High Court in Hollis v Vabu was whether Vabu Pty Ltd trading as Crisis Couriers (Vabu), was vicariously liable for the actions of a bicycle courier, who during the course of carrying out duties for Vabu, injured the plaintiff, Mr Hollis. As part of the consideration of this -- 3 of 7 -- 458 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 16 August, 2002 issue, the question of whether the relationship between Vabu and the bicycle courier was one of employment or independent contract, was also considered. The High Court decision in Hollis v Vabu dealt only with bicycle couriers. However, the issue of the nature of the relationship between Vabu and all of its couriers has been the subject of other litigation, which was also considered by the High Court in Hollis v Vabu. At first instance, in the District Court of New South Wales, Wright ADCJ found that the bicycle couriers were independent contractors, notwithstanding findings of fact identifying indicia of a relationship of employment between Vabu and the couriers. A significant factor influencing the decision at first instance, was that Wright ADCJ considered that he was bound by an earlier decision of the New South Wales Court of Appeal (Meagher, Sheller and Beazley JJA in Vabu Pty Ltd v Federal Commissioner of Taxation [(1996) 33 ATR 537] which held on substantially similar evidence to that before Wright ADCJ, that the bicycle couriers were independent contractors. This decision is referred to in the majority decision in Hollis v Vabu as “the taxation decision”. The taxation decision was the result of an appeal by Vabu from a decision of Ireland J in the Supreme Court of New South Wales, declining to make a declaration sought by Vabu, to the effect that it was not an employer. Ireland J had declined to make the declaration because he decided at common law, that the relationship between Vabu and all of its couriers was one of employment. In the taxation decision cited above, the Court of Appeal allowed Vabu’s appeal against the decision of Ireland J, finding that the relationship between Vabu and the couriers was one of employment. In the decision of the majority in Hollis v Vabu (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) findings of fact made in that other litigation were canvassed. To understand the majority decision it is necessary to examine those findings. The findings of fact made by Wright ADCJ at first instance, identified in the decision of the majority of the High Court in Hollis v Vabu were as follows: • Vabu set the rates of remuneration of its bicycle couriers and there was no scope for negotiation of those rates between the parties; • Vabu allocated the work with no scope for bidding for individual jobs by the riders; • couriers would call in each morning to indicate readiness for work; • work was allocated by Vabu’s fleet controller; • Vabu assumed responsibility for direction, training (if any), discipline and attire of couriers; • couriers were required to wear Vabu’s livery at all times; • Vabu provided couriers with numerous items of equipment which remained Vabu’s property and which included the only means of communication between Vabu and the couriers; • requirements such as insurance and deductions from pay were imposed on couriers without opportunity for negotiation. • couriers were in a “take it or leave it” situation, which was highlighted and exemplified by the fact that rates for courier jobs had not been altered for some time; and • couriers had signed a document headed “Contract for Service” which set out terms and conditions under which they were to perform work for Vabu. The taxation decision involved a refusal by Ireland J in the Supreme Court of New South Wales, to make a declaration that Vabu was not an employer for the purposes of the Superannuation Guarantee (Administration Act) 1992 (Cth). Ireland J decided that at common law the relationship between Vabu and all of its couriers was properly to be characterised as employment. The taxation decision considered all of Vabu’s couriers, including motor vehicle, motorcycle and bicycle couriers, however, no evidence was lead from bicycle couriers. The majority of the High Court in Hollis v Vabu, highlighted the following findings of Ireland J: • couriers had purchased their own transportation which included light commercial or domestic type vehicles; • couriers had to bear the expense of providing for and maintaining those vehicles, making payments for repairs and insurance, which were considerable; • couriers had to provide themselves with street directories, telephone books, ropes, blankets and tarpaulins; • Vabu was providing a system of work by presenting its image through uniforms and signage and imposing work practices; • it was the extent to which those work practices were imposed upon the daily routine of couriers as opposed to permitting a discretionary use of the system of work by couriers that was in part determinative of an employment relationship; • the rules imposed by Vabu demonstrated a significant degree of constraint on the discretion and flexibility of the courier in the performance of tasks; and • the notion of flexibility which forms a significant part of the underlying rationale of the relationship between principal and independent contractor, could not be said to feature with any prominence in the relationship between Vabu and its couriers. The Court of Appeal allowed an appeal by Vabu against the decision of Ireland J. Some of the findings on appeal were also highlighted in the majority decision of the High Court in Hollis v Vabu. Meagher JA held that a person may supervise others without becoming their employer and that couriers being paid a prescribed rate for the number of successful deliveries made rather than a monthly, weekly or daily amount, supported a conclusion that the couriers were not employees. Meagher JA considered that the couriers supplied their own vehicles, and had to bear the considerable expense of maintaining, repairing and insuring those vehicles. It was also held by Meagher JA that: “… each courier conducts his own operation, permitting himself for his own economic advantage to be supervised by the company. If this were not so, why would the documents anticipate that the courier may use a business name or a corporate name if he so wishes? A company does not usually have employee corporations.”. Sheller JA agreed that the matters referred to by Meagher JA indicated that there was not an employment relationship between Vabu and the couriers it engaged, and that the relationship did not answer the relevant description in the Superannuation Guarantee (Administration Act) 1992 (Cth). Beazely JA agreed with both judgments. In reaching the decision that bicycle couriers engaged by Vabu were employees, the majority of the High Court commented on findings and evidence in the litigation summarised above. In relation to the decision of Meagher JA, the majority observed that the purchase and maintenance of a bicycle could hardly be termed a “very considerable expense” and that in the taxation decision a different result might have properly been reached respecting Vabu’s bicycle couriers, from that which was reached with respect to its other couriers. The majority decision then went on to consider the evidence in the present litigation, noting the following matters: • couriers starting work with Vabu were given a modicum of instruction and filled out “employment forms” headed “contract for service”; • matters canvassed in the documents provided by Vabu to the couriers included reporting of accidents and injuries; dress standards; requirements for insurance premiums; return of uniforms and equipment on termination of the driver’s last contract of carriage and standards for vehicles; • some of the documentation given to drivers did not record important aspects of the contract such as rate of remuneration; -- 4 of 7 -- 16 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 459 S:\QIRCDEV-BASE\QGIG\2002\VOL 170\NO.17 16.08.02.DOCno.17 16.08.02 • some of the documentation provided to the couriers referred to annual leave and sick leave, although no payments of these were made by Vabu; and • Vabu did not make superannuation contributions on behalf of couriers. The majority of the High Court in Hollis v Vabu noted that the relationship of the parties was to be found not merely from contractual terms, both oral and written. Rather, the system which was operated under the contracts, and the work practices imposed by Vabu went to establishing the totality of the relationship. The statement of Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48 explaining that an independent contractor carries out work not as a representative but as a principal, was considered to warrant close attention. The majority went on to state: “… employees and independent contractors perform work for the benefit of their employers and principals respectively. Thus by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee. However, Dixon J fixed upon the absence of representation and of identification with the alleged employer as indicative of a relationship of principal and independent contractor. These notions were later expressed positively by Windeyer J in Marshall v Whittaker’s Building Supply Co [(1963) 109 CLR 210 at 217]. His Honour said that the distinction between an employee and an independent contractor is ‘rooted fundamentally in the difference between a person who serves his employer in his, the employer’s business, and a person who carries on a trade or business of his own.”. The majority in Hollis v Vabu then considered the notion of control as a means of distinguishing between a relationship of employment and one of independent contract, noting that the Court had adjusted the notion to circumstances of contemporary life in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, and had continued the developments in Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 and Humberstone v Northern Timber Mills (1949) 79 CLR 389. The statement of Mason J in Brodribb (at 29) that control is not the only relevant factor and that the totality of the relationship must be considered, was also cited with approval by the majority in Hollis v Vabu. In determining that bicycle couriers considered in Hollis v Vabu were employees, the majority said: “In classifying the bicycle couriers as independent contractors, the Court of Appeal fell into error in making too much of the circumstances that the bicycle couriers owned their own bicycles, bore the expenses of running them and supplied many of their own accessories. Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant, and greater skill and training were required to operate it.”. The majority decision goes on to consider the nature of the engagement of bicycle couriers by Vabu, noting the following: • they were not providing skilled labour or labour which required special qualifications; • they were unable to make an independent career as a free-lancer or go generate any “goodwill” as a bicycle courier; • the notion that they were running their own enterprise was intuitively unsound and denied the facts disclosed in the record; • there was little control by the couriers in the manner of performing their work. They were required to be at work at certain times and were assigned to a roster; • the evidence did not disclose whether couriers could delegate their work or whether they could have worked for another courier operator in addition to Vabu during the day, although it might be thought unlikely that Vabu would have allowed them to do so; • stipulations in writing by Vabu to the couriers about leave, suggested that their engagement by Vabu left couriers with limited scope for the pursuit of any real business enterprise on their own account; • couriers were presented to the public and those using the courier service, as emanations of Vabu, with direction being provided as to the wearing of uniforms and personal appearance; • Vabu superintended the courier’s finances, to the extent that it produced pay summaries, and couriers were required to dispute errors by a specified time each week. Couriers were also told that “unjustified or unsubstantiated” claims for additional charges could result in total deduction of that particular job payment; • there was no scope for couriers to bargain for their rate of remuneration, and the rate had remained unchanged between 1994 and 1998; • Vabu was entitled to withhold the pay of a courier for six weeks in certain circumstances, and final cheques would not be processed until all Vabu’s property was returned. Washing costs or costs associated with the repair of damage to equipment, could also be deducted from final payments; • the method of payment per delivery and not per time period engaged, is a natural means to remunerate employees whose sole duty is to perform deliveries; • there is nothing contrary to a relationship of employment in the requirement for couriers to provide and maintain their own bicycles and to bear the costs of replacing any equipment of Vabu that was lost or damaged; and • this is all the more so given the relatively small capital outlay associated with bicycles and because they are not capable of use only for courier work but provide a means of personal transport or even of recreation, outside of work time. The majority also held that this was not a case where there was only the right to exercise control in incidental or collateral matters, but rather, one where there was considerable scope for the actual exercise of control, stating that: “Vabu’s whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction or the various deliveries. The couriers had little latitude. Their work was allocated by Vabu’s fleet controller. They were to deliver goods in the manner in which Vabu Directed. In this way, Vabu’s business involved the marshalling and direction of the labour of couriers, whose efforts comprised the very essence of the public manifestation of Vabu’s business. It was not a case that the couriers supplemented or performed part of the work undertaken by Vabu or aided from time to time; rather, as the two documents relating to work practices suggest, to its customers they were Vabu and effectively performed all of Vabu’s operations in the outside world. It would be unrealistic to describe the courier other than as employees.”. Were the Claimants in this Case Employees or Independent Contractors? Because of the failure on the part of the respondent to attend the hearing into these applications, or to put evidence before the Commission in a manner which would render it admissible, the evidence called by the ALHMWU is essentially uncontested. In relation to Mr Kemp, on consideration of that evidence I can see no basis for any finding other than that Mr Kemp was an employee of the respondent at all relevant times. With respect to Mr Chancellor and Mr Cole, there are a number of indicia, which point to the relationship being that of independent contract, and a number which point to the relationship of employment. Commenting on the approach in determining whether a relationship is one of employment or -- 5 of 7 -- 460 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 16 August, 2002 independent contract, a Full Bench of the Industrial Relations Commission of South Australia, in Belcaro (T/as Breakaway Security) v Sheahan [2002] SAIRComm 29 File No 2553 of 2001, noted that the decision in Hollis v Vabu had not altered the law, in that it was not suggested by the High Court that a more prominent emphasis must be given to issues such as the provision of tools, equipment and uniforms, without an assessment as to the context of the supply of the same. With this view, I respectfully agree. It remains the case that in order to determine whether a relationship is that of employment or independent contract, it is necessary to weigh up the various competing indicia and to consider the totality of the relationship between the parties: Hollis v Vabu [2001] HCA 44 at par 29; Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29. The indicia of a relationship of independent contract in the cases of Mr Chancellor and Mr Cole, can be summarised as follows. Both Mr Chancellor and Mr Cole concede that at the point they commenced to perform the work of security guards for the respondent, they were told that they were sub- contractors, and would be required to submit invoices in order to be paid for work performed. Both complied with this requirement and submitted invoices to the respondent in order to be paid. Further, Mr Cole applied for and obtained an Australian Business Number in order to be able to submit invoices. Both were told that they would be responsible for their own taxation arrangements. Mr Chancellor utilised a business he had previously registered for the purposes of conducting fire training, to invoice the respondent for his services as a security guard. Mr Chancellor paid tax on his earnings from the respondent on the basis of that business, an entity known as F.A.T.S. In evidence Mr Chancellor said that he had viewed the security work performed for the respondent as a source of other income, due to a decline in fire training work. Mr Cole said that he had provided his own torches, baton, earpieces for the radio and radio belt clip. On occasions, Mr Cole also used his own vehicle to undertake patrols for the respondent. The indicia of an employment relationship in the cases of Mr Chancellor and Mr Cole can be summarised as follows: There is no evidence to suggest that Mr Chancellor or Mr Cole expressed any intention to form a relationship of independent contract with the respondent. Rather, the evidence is that this arrangement was instigated by the respondent, with the acquiescence of both claimants. No contract or documentation detailing the intended relationship was signed by the claimants. While both Mr Chancellor and Mr Cole utilised registered businesses to invoice the respondent for hours worked, the evidence demonstrates that this was at the instigation of the respondent rather than either claimant. Mr Cole’s evidence was that Mr Soutar told him that if he wanted to work for the respondent, then being a sub-contractor “is the way it works”. Further, Mr Cole’s evidence was that Mrs Soutar told him that he would have to apply for an ABN in order to be paid by the respondent. Mr Cole also stated that no profit or loss was made through the business which he established at the request of the respondent. Mr Chancellor stated that a business he had set up for the purpose of undertaking fire training was utilised by him, to comply with the request of Mr Soutar that payment for Mr Chancellor’s services be made to a registered business. Mr Chancellor said that the business was not set up for the purpose of undertaking security services. Further, the business had made no profit either from fire training or the provision of security services, and had ceased to perform fire training in November 2000. Further, the evidence is that Mr Chancellor and Mr Cole were subject to daily direction by Mr Soutar as to the manner in which work was to be performed. Both were required to work in accordance with a roster which specified starting and finishing times, and the locations at which work was to be performed. In the event of being unavailable to work in accordance with the roster, both were required to advise the respondent and the respondent found a replacement guard for that shift. Mr Cole’s evidence was that Mr Soutar had provided him with various pieces of equipment including shirts with both ERS and Westfield logos. On occasion, Mr Cole had used Mr Soutar’s vehicle, to undertake mobile patrols. While Mr Cole had provided some of his own equipment, there was no change regarding provision of that equipment, after Mr Cole was told by the respondent that he would cease to be a sub- contractor and be treated as an employee, from some point in mid 2000. There is no evidence before me as to whether Mr Chancellor provided any of his own equipment. After weighing the evidence, I have concluded that both Mr Chancellor and Mr Cole were employees of the respondent for the entire period covered by their claims. It has long been established that the words defining a particular relationship, whether written or oral, are not decisive of whether the relationship is one of employment or independent contract. The comprehensive discussion of the definition of employee in Industrial Laws of Queensland Second Edition (Government Printer Queensland 1988) includes the following statement at p. 18: “The question is one for the court. It is open to the parties to decide whether or not they wish to enter into the relationship. It is not open to them to convert a contract which in the eye of the law is one of service into a contract for services merely by so describing it in the contract: Thiel v The Mutual Life and Citizens Assurance Co Ltd (1919) 14 QJPR 5; Binding v G.T. Yarmouth and Port Hoven Commissioners (1923) 16 BWCC 28.”. The evidence of Mr Chancellor and Mr Cole that there was an express statement from the respondent that the relationship was one of independent contract, is not determinative of this matter. While an express statement will be given weight, that weight will be greater where there is no reason to think that the provision is a sham or that the provision is not a genuine statement of the parties’ intentions: Australian Mutual Provident Society of Australia v Allan (1978) 52 ALJR 407 at 409 where the decision of Lord Denning MR in Massey v Crown Life Insurance Co (4 November 1977, unreported) is cited. It should be noted that both cases were in relation to a written contract. In this case, the evidence shows that Mr Cole and Mr Chancellor were in a “take it or leave it” situation when the respondent told them that if they wanted to work for him they would be required to do so as independent contractors. Further, it is open on the evidence to find that the arrangement was more about an attempt by the respondent to legitimise the payment of a flat hourly rate, than it was about establishing a relationship of independent contract. I am also of the view that the express oral statement that the relationship between the respondent and Mr Cole and Mr Chancellor is outweighed by other indicia, which clearly establish that the true relationship was one of employment. I am also of the view that it is not fatal to the claim of Mr Cole that he established a registered business for the purposes of being paid by the respondent. The evidence shows that Mr Cole took this step at the instigation of the respondent, and because he had been told that this was the only way in which he would be paid for work performed. Similarly, that Mr Chancellor chose to use a business name that he had established for other purposes, does not alter the fact that the respondent had indicated that payment would only be made to a registered business, and is not determinative of Mr Chancellor’s status. This is also consistent with the decision of the majority of the High Court in Hollis v Vabu, where bicycle couriers were held to be employees, notwithstanding a finding by the New South Wales Court of Appeal in what was termed “the taxation decision” that documentation recording the arrangements between Vabu Pty Ltd and its couriers, anticipated that the courier might use a business name or a corporate name if the courier so wished. In Hollis v Vabu, the courier who struck the plaintiff was not identified, and it follows that it was not known whether the courier in question had used a business name. There is nothing in the decision in Hollis v Vabu to indicate that had the courier in question been identified, and used a business name, that the outcome would have been different. Clearly, the use of a business name is simply one of the indicia that may be considered in determining whether relationship is one of employment or independent contract, and is not in itself, determinative of that question. The circumstances of Mr Chancellor and Mr Cole are not those discussed by the South Australian Industrial Relations Commission in Breakaway Security, where there was: -- 6 of 7 -- 16 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 461 “…expressed intention of the parties, being two independent persons who expressly and deliberately furthered their respective business interests through what they intended to be an independent contractual relationship.”. I accept the submission of Mr Crank, that the facts in this case are similar to those considered by the High Court in Hollis v Vabu, and the application of those facts to the law as stated in that decision, leads to the same outcome. Without denigrating the important work performed by security guards, there is nothing in this case to suggest that the work was skilled or required special qualifications. The rosters which the respondent required Mr Cole and Mr Chancellor to work, would have made an independent career as a free-lancer difficult if not impossible to establish. There was little control by either claimant over the manner of performing their work and they were required to work in accordance with a roster, stipulating the starting and ceasing times of work. Neither of the claimants was able to delegate their work, and the evidence showed that if they were unable to perform work, the respondent would arrange a replacement guard. Shirts bearing the respondent’s logo were provided to Mr Chancellor and Mr Cole and they were presented to customers and the public as emanations of the respondent. There was no scope for either Mr Chancellor or Mr Cole to bargain for their remuneration, and the evidence showed that the remuneration was adjusted at the sole discretion of the respondent. The equipment provided by Mr Chancellor and Mr Cole was of a relatively low value, and was certainly below the value of the bicycles provided the couriers in Hollis v Vabu. It is also apparent from the evidence, including the respondent’s letterhead, that the respondent’s whole business consisted of the provision of security services in the form of guards and patrols. The respondent rostered and directed guards to provide security services. Thus, the respondent’s business involved the marshalling and direction of guards whose efforts comprised the very essence of the public manifestation of it business. The guards did not supplement or perform part of the work of the respondent, or perform part of the respondent’s work from time to time. Rather, the guards were Efficent Reliable Security, and performed all of the respondent’s operations in the outside world. It is also significant that there was no change to the manner in which Mr Cole or Mr Chancellor performed work after mid 2000 when the GST was introduced, and the respondent purported to transform their relationship to one of employment. For the reasons outlined above, this action on the part of the respondent had no effect, because the claimants were employees at all times. Accordingly, I order that the respondent, Efficent Reliable Security BN7093690 pay: • to David Alexander Cole the amount of $10,689.26; • to Adam James Kemp the amount of $2,230.09; and • to Kenneth James Chancellor the amount of $10,689.26. • Such amounts are to be paid within 21 days of the date of release of this decision. I.C. ASBURY, Commissioner. Released: 5 August 2002 Appearances:– Mr K. Crank of the Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees. -- 7 of 7 --