FEDERAL COURT OF AUSTRALIA

 

Wilton & Cumberland v Coal & Allied Operations Pty Ltd

[2007] FCA 725

WORKPLACE RELATIONS – applicants provided to respondent coal miner by way of labour hire entity – coal miner additionally retained workers on its own payroll – applicants worked on site alongside coal miner’s employees – whether applicants so hired became employees of coal miner according to law irrespective of extent of contractual relationship subsisting concurrently between labour hire provider and applicants – examination of Australian and United Kingdom authority and of statutory and judicial indicia bearing upon issues arising inclusive of implications of labour hire – whether employment relationship existed between applicants and respondent coal miner irrespective of labour hire arrangement – no employment arrangement in operation between coal miner and applicants according to law

Workplace Relations Act 1996 (Cth) ss 4, 101, 103, 114, 170LT, 178(1) and (6), 179A, 356 and 412

Federal Court of Australia Act 1976 (Cth) ss 21, 22 and 23

Occupational Health and Safety Act 1983 (NSW) s 15(1) (repealed)

Occupational Health and Safety Act 2000 (NSW) s 8(2)

Coal Mines Regulation Act 1982 (NSW) ss 34-36, 37, 38, 42, 43, 101, 103 and 114, Schedule 1 Part B (repealed)

Coal Mine Health and Safety Act 2002 (NSW) (generally)

Coal Mines (Open Cut) Regulation 1999 (NSW) cll 10 and 11 and Part 2

Coal Mines (General) Regulation 1999 (NSW) cl 79 (repealed)

Carter JW and Harland DJ, Contract Law of Australia (4^th ed, Butterworths, 2002)

ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 153 IR 228referred to

A/asian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd & Ors (T/as Sunland Wholesale Meats) (1998) 24 IR 467 referred to

Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540 referred to

BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2006) 151 IR 361 referred to

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153cited

Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 discussedand distinguished

Building Workers’ Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104cited

Byrne v Australian Airlines Limited (1995) 185 CLR 410 cited and discussed

Cable & Wireless plc v Muscat [2006] IRLR 354 discussed and distinguished

Carrington Slipways Pty Limited v Callaghan (1985) 11 IR 467cited

Dalgety Farmers Ltd t/as Grazcos v Bruce & Another (1995) 12 NSWCCR 36 cited

Damevski v Giudice and Others (2003) 133 FCR 438 cited and discussed

Doyle v Sydney Steel Company Limited (1936) 56 CLR 545cited

Drake Personnel Ltd and Others v Commissioner of State Revenue (2000) 2 VR 635 cited

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 applied

Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1 cited

Hollis v Vabu Pty Limited (2001) 207 CLR 21 referred to

Howard Smith & Company Limited v Varawa (1907) 5 CLR 68 referred to

Humberstone v Northern Timber Mills (1949) 79 CLR 389 referred to

Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 cited and discussed

Macdonald v Australian Wool Innovation Ltd [2005] FCA 105cited

Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438 at 443 referred to

Mead v New England Seed Traders Pty Limited [1972] WCR (NSW) 113 cited

Pitcher and Another v Langford and Another (1991) 23 NSWLR 142 cited

Queensland Stations Proprietary Limited v The Federal Commissioner of Taxation (1945) 70 CLR 539 referred to

Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 cited

Reed v Blue Line Cruises Limited (1996) 73 IR 420cited

The Roy Morgan Research Centre Pty Ltd v Commr of State Revenue (Vic) (1997) 97 ATC 5070 cited

Stephenson v Delphi Diesel Systems Ltd [2003] ICR (Industrial Cases Reports for England and Wales) 471 referred to

Stevens v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16 applied

Swift Placements Pty Limited v WorkCover Authority of New South Wales (2000) 96 IR 69 cited

Teen Ranch Pty Ltd v Brown (1995) 87 IR 308 referred to

The Queen v Foster and Others; Ex parte Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138 referred to

Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510 discussed

WorkCover Authority of New South Wales (Inspector Robins) v Labour Co-operative Ltd (No 1) (2001) 108 IR 283

KEVAN WILTON AND STEVEN TREVOR CUMBERLAND v COAL & ALLIED OPERATIONS PTY LTD

NSD 565 OF 2005

 

CONTI J

15 MAY 2007

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 565 OF 2005

 

BETWEEN:	KEVAN WILTON First Applicant   STEVEN TREVOR CUMBERLAND Second Applicant
AND:	COAL & ALLIED OPERATIONS PTY LTD Respondent

 

JUDGE:	CONTI J
DATE OF ORDER:	15 MAY 2007
WHERE MADE:	SYDNEY

 

THE COURT ORDERS THAT:

 

1.                  The application be dismissed.

2.                  There be liberty to the respondent to apply within 14 days in relation to any ancillary or consequential relief according to law.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 565 OF 2005

BETWEEN:	KEVAN WILTON First Applicant   STEVEN TREVOR CUMBERLAND Second Applicant
AND:	COAL & ALLIED OPERATIONS PTY LTD Respondent

 

JUDGE:	CONTI J
DATE:	15 MAY 2007
PLACE:	SYDNEY

INDEX

Outline of proceedings and of issues arising – mutually agreed facts and circumstances   [1]

The relief sought by the applicants    [6]

Circumstances in chronological sequence attending the engagement by Mining & Earthmoving Services Pty Ltd (‘MES’) of Mr Wilton to the extent mutually acknowledged or not put in issue between the parties   [11]

Circumstances in chronological sequence relating to the engagement by MES of Mr Cumberland to the extent mutually acknowledged or not put in issue between the parties  [19]

MES Certified Agreement 2004 and related written material further provided or otherwise sent by MES to each of Mr Wilton and Mr Cumberland   [20]

The relief sought by the applicants against Coal & Allied Operations Pty Ltd (‘CAO’) and the issues raised by the applicants and CAO respectively in relation thereto   [21]

Principles governing the juridical approach to determination of the existence or otherwise of an employment relationship – authorities cited by the applicants   [26]

Circumstances beyond the scope of evidentiary common ground – the operation of the mining equipment of CAO by the applicants and related matters   [37]

Supervision of the applicants in the course of their respective working activities in the context of the Hunter Valley Operations (‘HVO’) – statutory and regulatory requirements as to mine management  [46]

The structure in place for management at the HVO – further matters related to control of personnel engaged in mining work in the HVO   [53]

Responsibility of CAO for management and discipline of the applicants – evidence adduced and submissions made by the applicants and CAO respectively   [62]

Contractual arrangements made between the applicants and CAO – ultimate submissions of the applicants by way of what appeared in the so-called ‘Conclusions’ to their submissions on that issue   [82]

The applicants’ invocation of United Kingdom authority as an illustration of the juridical significance of its case in a labour-hire context  [83]

The relief sought by Messrs Wilton and Cumberland against CAO  [98]

Calculations of the monetary value of the underpayments claimed by each of the applicants   [107]

Outline of submissions of CAO in response to the submissions of Messrs Wilton and Cumberland   [108]

Intention to create legal relationships   [113]

Lack of agreement on essential terms   [114]

The conduct of the respective parties to the proceedings as indicative of the existence or otherwise of contractual relationships between each of the applicants and the respondent CAO   [117]

Further incidental conduct of MES as indicative or otherwise of the existence of a contractual relationship between the applicants and MES   [120]

Lack of evidence on other issues bearing upon the existence of any employment relationship as between CAO on the one hand and Messrs Wilton and Cumberland on the other  [124]

Overall position of CAO on general analysis  [125]

Mutual assent analysis   [126]

The conduct and functions of the respective parties as indicative or otherwise of the existence of an employment relationship between the applicants and CAO – an overview of authority and its operation here as put forward by CAO  [132]

Other factors contended by CAO in support of its case in denial of liability for the applicants’ claim made upon and in relation to CAO  [149]

CAO’s response to the applicants’ invocation of the authorities of Brook Street and Cable & Wireless – a detailed analysis of those authorities and their significance or otherwise in employment contexts such as here to the operation of the general law in Australia   [157]

Conclusions   [174]

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 565 OF 2005

BETWEEN:	KEVAN WILTON First Applicant   STEVEN TREVOR CUMBERLAND Second Applicant
AND:	COAL & ALLIED OPERATIONS PTY LTD Respondent

 

JUDGE:	CONTI J
DATE:	15 MAY 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Outline of proceedings and of issues arising – mutually agreed facts and circumstances

1                     The respondent Coal & Allied Operations Pty Ltd (‘CAO’) has conducted at all material times the Hunter Valley Operations (‘HVO’), involving a multiple-seam, multiple-pit open cut Coal mine situated approximately 24 km north-west of Singleton in the Hunter Valley region of New South Wales.  In the year 2000, the HVO was formed by the merger of three mines comprising the Hunter Valley No. 1 Mine, the Hunter Valley No. 2 Mine and the Howick Mine.  In about March 2001, a fourth mine comprising the Lemington Open Cut Coal Mine was acquired by CAO and integrated into the HVO.  At all materials times, Coal was extracted from the following three main mining areas or so-called pits within the HVO:

(i)                  the West Pit (formerly known as the Howick Mine) involving open cut mining operations, which were primarily conducted with the use of dragline mining operations, shovels and trucks;

(ii)                the North Pit comprising an area made up of two pits, being the original North Pit and the Carrington Pit, which areas required or involved multi-seam open cut mining operations primarily by the use of trucks and shovels;

(iii)               the South Pit, also known as the Chestnut or Riverview Pit (formerly known as the Lemington Open Cut Coal Mine), which also comprised open cut mining operations involving primarily the use of trucks, shovels and dragline mining operations.

2                     Throughout the course of the HVO, CAO has operated a range of heavy mining equipment and employed at least 260 permanent employees working mainly in crews.  As operator of the HVO, CAO and certain persons engaged by CAO have been under obligations with respect to safety of the mining operations, being obligations imposed by the provisions of the Occupational Health and Safety Act 2000 (NSW) (‘the OHS Act’) and the Coal Mines Regulation Act 1982 (NSW) (‘the CMR Act’).  The latter of those statutes has since been repealed and replaced by the Coal Mine Health and Safety Act 2002 (NSW) (‘CMHS Act’).  CAO employed at the HVO at least one Mine Manager who had full charge and control of persons engaged at least physically in relation thereto, whether or not as employees of CAO according to law, and of all operations otherwise undertaken under the general description of the HVO.  CAO employed a number of persons as Deputies to the Mine Manager and a number of Open Cut Examiners (‘OCEs’).  Hence at all material times, the Mine Manager, the Deputies and the OCEs have supervised the mining operations undertaken by CAO at the HVO. 

3                     On 20 October 2000 the Hunter Valley Operations Certified Agreement 2000(‘the 2000 Agreement’) was certified by the Australian Industrial Relations Commission (‘the Commission’) under s 170LT of the Workplace Relations Act 1996 (Cth)(‘the WR Act’), as in force prior to amendment by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth).  From that time until 12 December 2003, CAO was bound by the 2000 Agreement in respect of its employees engaged in production and engineering functions at the HVO.  On 12 December 2003 the Hunter Valley Operations Certified Agreement 2003(‘the 2003 Agreement’) was similarly certified, and from that date to at least 31 December 2004, CAO was bound by the 2003 Agreement in respect of its employees so engaged.  Both Agreements were tendered into evidence as Exhibit 1 to the Agreed Statement of Facts.  Exhibit 1 was incorporated into a substantial compilation of so-called Judge’s Copy Documents consisting of more than two thousand pages, along with certain additional documents.  Hence Exhibit 1 came to embody two different pagination systems for each of the large number of pages therein contained.  Because of the difficulty of locating so many documents of potential relevance to the respective cases of the applicants and CAO, I have adopted the expedient course of identifying those documents not only by name or other description, but additionally by their individual pagination numbers as incorporated within Exhibit 1.  The parties to both Certified Agreements were CAO, the Construction, Forestry, Mining & Energy Union and The Automotive Food, Metals, Engineering, Printing and Kindred Industries Union, and in the case of the 2000 Agreement, ‘in relation to employees engaged in production and engineering functions in the Hunter Valley Operation’ (cl 4), including ‘additional employees to meet increased workloads or cover for holiday or other absences through the employment of part-time, temporary or casual employees’ (cl 13), and in the case of the 2003 Agreement, ‘… full-time, part-time, temporary or casual employees…’ (cl 10). 

4                     On 9 February 1994, Mining & Earthmoving Services Pty Ltd (‘MES’) was incorporated.  As the successor to business operations previously undertaken under the same or similar control in the Hunter Valley region, MES has engaged in business as a mining consultant, and in the supply of casual labour to the mining industry in which CAO has been for some time a substantial participant, at least principally by way of open cut mining operations.  The activities of MES were mainly in the area geographically of the HVO.  A copy of documents describing in detail MES’s activities appear in detail at pages 31 to 63 of Exhibit 1.  On 21 June 2001, the Mining & Earthmoving Service Pty Limited Certified Agreement 2001 (‘the MES Agreement’) was certified by the Commission under s 170LT of the WR Act, with effect from 25 May 2001 until 24 May 2004, the parties thereto being MES and ‘[p]resent and future employees of [MES]’.  On or about 21 August 2002 MES tendered successfully ‘for the supply of maintenance and production of labour hire’ to CAO in relation to its Coal mining operations at Ravensworth in the Hunter Valley upon the basis of a detailed schedule of rates. 

5                     The central issue arising in the proceedings may be broadly described as whether the applicants were the subject of an employment relationship according to the general law, as between themselves as employees and CAO as employer, irrespective of the documentary arrangements put in place by MES as between itself as employer and its employees inclusive purportedly of the applicants.  If the former situation constituted an employment relationship according to law in respect of each of the applicants, they would be seemingly entitled to look to CAO for remuneration and any other pecuniary employment benefits which may have accrued to each of them had they been recognised by CAO as its employees.  The respective engagements (to use for the present a neutral term) of the applicants in mining activity in the HVO ceased, in the case of Mr Wilton, in May 2005, and in the case of Mr Cumberland at a time occurring during April 2005, and at about the same respective times, each of them commenced employment with the corporately unrelated Felix Resources Limited, being apparently another Coalminer. 

The relief sought by the applicants

6                     The nature and extent of the relief sought appears comprehensively in the amended application filed on 1 December 2006, though the proceedings were originally commenced on 12 April 2005 by the applicants by an original application and statement of claim.  It is appropriate that I set out below the full text of the relief sought by the amended application by way of declarations and orders thereby sought:

‘Application is made under Sections 178, 179A, 356 and 412 of the Workplace Relations Act 1996 (the WR Act) and Sections 21, 22 and 23 of the Federal Court of Australia Act 1976 (the FC Act).

A.                Details of Claim

 

On the grounds stated in the accompanying Statement of Claim, the First and Second Applicants seek:

 

1.         A declaration that the Respondent breached a term of the Hunter Valley Operations Certified Agreement 2000 (the 2000 Agreement) in that for the period 1 July 2002 to 30 June 2003 the Respondent failed to pay to the First Applicant the annual salary set out in clause 19 of the 2000 Agreement.

 

2.         An order pursuant to section 178(6) of the WR Act that the Respondent pay to the First Applicant an amount of $4,697 being the amount the First Applicant was underpaid his entitlement under clause 19 of the 2000 Agreement for the period 1 July 2002 to 30 June 2003.

 

3.         An order under section 179A of the WR Act that the Respondent pay interest at such rate as the Court thinks fit on the whole of the amount referred to in Order 2 from 30 June 2003 until judgment is entered.

 

4.         An order imposing a penalty on the Respondent pursuant to section 178(1) of the WR Act for breach of clause 19 of the 2000 Agreement.

 

5.         An order pursuant to section 356 of the WR Act that the penalty imposed under Order 4 be paid to the First Applicant.

 

6.         A declaration that the Respondent breached a term of the 2000 Agreement in that for the period 1 July 2002 to 30 June 2003 the Respondent failed to pay to the Second Applicant the annual salary set out in clause 19 of the 2000 Agreement.

 

7.         An order pursuant to section 178(6) of the WR Act that the Respondent pay to the Second Applicant an amount of $8,410 being the amount the Second Applicant was underpaid his entitlement under clause 19 of the 2000 Agreement for the period 1 July 2002 to 30 June 2003.

 

8.         An order under section 179A of the WR Act that the Respondent pay interest at such rate as the Court thinks fit on the whole of the amount referred to in Order 7 from 30 June 2003 until judgment is entered.

 

9.         An order imposing a penalty on the Respondent pursuant to section 178(1) of the WR Act for breach of clause 19 of the 2000 Agreement.

 

10.       An order pursuant to section 356 of the WR Act that the penalty imposed under Order 9 be paid to the Second Applicant.

 

11.       A declaration that the Respondent breached a term of the Hunter Valley Operations Certified Agreement 2003 (the 2003 Agreement) in that for the period 1 July 2004 to 31 December 2004 the Respondent failed to pay to the First Applicant the annual salary set out in clause 17 of the 2003 Agreement.

 

12.       An order pursuant to section 178(6) of the WR Act that the Respondent pay to the First Applicant an amount of $12,845.31 being the amount the First Applicant was underpaid his entitlement under clause 17 of the 2003 Agreement for the period 1 July 2004 to 31 December 2004.

 

13.       An order under section 179A of the WR Act that the Respondent pay interest at such rate as the Court thinks fit on the whole of the amount referred to in Order 12 from 31 December 2004 until judgment is entered.

 

14.       An order imposing a penalty on the Respondent pursuant to section 178(1) of the WR Act for breach of clause 17 of the 2003 Agreement.

 

15.       An order pursuant to section 356 of the WR Act that the penalty imposed under Order 14 be paid to the First Applicant.

 

16.       A declaration that the Respondent breached a term of the 2003 Agreement in that for the period 1 July 2004 to 31 December 2004 the Respondent failed to pay to the Second Applicant the annual salary set out in clause 17 of the 2003 Agreement.

 

17.       An order pursuant to section 178(6) of the WR Act that the Respondent pay to the Second Applicant an amount of $20,531.20 being the amount the Second Applicant was underpaid his entitlement under clause 17 of the 2003 Agreement for the period 1 July 2004 to 31 December 2004.

 

18.       An order under section 179A of the WR Act that the Respondent pay interest at such rate as the Court thinks fit on the whole of the amount referred to in Order 17 from 31 December 2004 until judgment is entered.

 

19.       An order imposing a penalty on the Respondent pursuant to section 178(1) of the WR Act for breach of clause 17 of the 2003 Agreement.

 

20.       An order pursuant to section 356 of the WR Act that the penalty imposed under Order 19 be paid to the Second Applicant.

 

21.       Such other or further orders as the Court considers appropriate.’

 

What pecuniary adjustment would be put in place in the event of the applicants’ success against CAO in the proceedings, as between the applicants and MES, is unclear, but is of no concern in the context of resolution of the present proceedings. 

7                     Section 178 of the WR Act relates to the imposition and recovery of penalties, subsections (1) and (6) thereof reading as follows:

‘(1)      Where an organisation or person bound by an award, an order of the Commission (whether under this Act, the Registration and Accountability of Organisations Schedule or otherwise) or a certified agreement breaches a term of the award, order or agreement, a penalty may be imposed by the Court or by a court of competent jurisdiction.

…

(6)       Where, in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount that the employer was required to pay under an award, order or agreement, the court may order the employer to pay to the employee the amount of the underpayment.’

Section 179A of the WR Act authorises payment of interest on ‘the sum for which an order is made or judgment given’, and s 356 of the WR Act further authorises the payment of a monetary penalty or a part thereof ‘to a particular organisation or person’.  Section 412 of the WR Act confers jurisdiction relevantly on this Court. 

8                     Between at least 1 June 2001 and 31 December 2004, CAO engaged MES to supply certain classifications of workers for engagement at the HVO.  MES provided inter alia the applicants Mr Wilton and Mr Cumberland for work at the HVO during those times.  Initially the arrangements for that supply had not been formalised in a written document.  Upon receipt of CAO’s formal request for the provision of workers, MES would furnish a number of names and CAO would make its selection.  Thereafter the selected workers would attend at the site of the HVO for work on shifts physically as part of CAO’s workforce and in accordance with rosters prepared by CAO.  Those selected workers were paid by MES for the hours they worked, and MES invoiced CAO on a weekly basis in respect of the work performed by workers supplied by MES.  Those invoices were based upon MES time sheet forms which each such worker filled out and signed and submitted to MES.  Each was allocated accordingly a MES employee number. 

9                     At least between those respective times:

(i)                  the CAO submitted formal purchase orders to MES in respect of the work CAO required to be performed by workers to be supplied by MES;

(ii)                MES submitted invoices to CAO on a weekly basis in respect of the work thus performed by workers supplied by MES;

(iii)               CAO paid MES the amounts specified in the invoices.

A sample of those purchase orders which CAO submitted to MES form part of Exhibit 1 at pages 78 to 140 thereof, and sample invoices submitted by MES to CAO form part of Exhibit 1 at pages 141-533 thereof.  No moneys were thus paid by CAO to either applicant for their respective services, MES performing the function of a labour hire provider. 

10                  In early August 2002 or thereabouts, CAO invited MES, and other employment personnel providing entities, to tender for a contract to supply labour to CAO for mining work being undertaken by CAO at the HVO, being Tender No. CNA-04-072; a copy of the letter dated 2 August 2002 constituting that invitation to tender forms part of Exhibit 1 at pages 534-582.  On or about 21 August 2002, MES submitted pricing to CAO in relation to its tender, and a copy of that submission comprises pages 1 to 28 of Confidential Exhibit 2.  Subsequently in about late August or September 2003, MES entered into a written agreement with CAO (or more precisely with Rio Tinto Coal (NSW) Pty Ltd as agent for CAO) for the supply of so-called ‘supplementary labour hire’, being Contract No. SA-01-073 (‘the Supply Agreement’), a copy whereof comprises pages 29 to 67 also of Confidential Exhibit 2.  The applicants contended, though apparently not until after principal written submissions of the respective parties had been furnished, that they were not ‘supplied’ to CAO under or pursuant to the Supply Agreement, for the reason that they had already commenced work at the HVO, and to use their description ‘were attending in accordance with [CAO’s] request that they turn up in accordance with a roster’.  Upon that purported footing, the applicants submitted that the Supply Agreement ‘has no relevance to the relationship between the applicants and [CAO]’, that submission going to the nub of the issues arising in the proceedings, since the applicants’ case was of course that in substance and reality and therefore according to law, the applicants were at all material times employees of CAO and should have been remunerated accordingly. 

Circumstances in chronological sequence attending the engagement by Mining & Earthmoving Services Pty Ltd (‘MES’) of Mr Wilton to the extent mutually acknowledged or not put in issue between the parties

11                  As to particularity of the circumstances attending Mr Wilton’s engagement by MES (using the term ‘engagement’ neutrally), the following matters were the subject of agreement between Mr Wilton and CAO for the purpose of the proceedings (the complexity of the circumstances of the case requires that all of such undisputed matters be recorded in these reasons for ease of reference, irrespective of the varying extent of materiality thereof).  The pagination of all documentation referred to below within Exhibit 1 is recorded below:

(i)                  on or about 1 June 2001, Mr Wilton completed an MES form called ‘Registration of Interest – Casual/Temporary Employment’, and submitted that form and his resume of mining experience to MES (comprising pages 583-586 of Exhibit 1);

(ii)                on 6 June 2001, MES inquired of Mr Wilton whether he would be willing to work at the HVO on a night shift commencing at 11.00 pm; Mr Wilton indicated his willingness so to do; Mr Wilton commenced work at the HVO on that night shift commencing at 11.00 pm; Mr Wilton reported for that purpose to Mr Greg Hamilton, a shift supervisor for the B crew at the Chestnut Pit of the HVO and being the OCE working on that shift, and Mr Hamilton assigned Mr Wilton to work as a truck driver on that shift;

(iii)               on or about 18 June 2001, MES completed ‘Section B’ of a ‘Tax file number declaration’ form in respect of Mr Wilton for submission to the Australian Taxation Office (Exhibit 1 at page 587); on 17 September 2001, MES completed a form regarding Mr Wilton’s employment for submission to Centrelink (Exhibit 1 at page 588); on 20 December 2001, Mr Wilton completed an MES form authorising and directing his statutory superannuation contributions to be made to COALSUPER (Exhibit 1 at page 589);

(iv)              From 6 June 2001 to about 18 January 2002:

(a)                Mr Wilton worked at the HVO for an eight hour shift on a five days per week roster as part of the B crew at the Chestnut Pit, although on at least two of those days Mr Wilton did not work because CAO informed Mr Wilton that it did not require him to work on that day due to inclement weather or machinery breakdown;

(b)               when Mr Wilton worked at the HVO, he signed a contractor register book supplied by CAO located at the entry to the HVO, both at the start and the end of each shift;

(c)                during the hours of the shifts that Mr Wilton worked at the HVO, he was subject to supervision and direction from the same person(s) as other workers on the B crew;

(d)               in January 2002, CAO changed its operations at the Chestnut Pit from eight hour shifts to 12 hour shifts; that month, CAO informed Mr Wilton of the changes to the shifts, and CAO assigned Mr Wilton to work as part of the D crew at the Chestnut Pit;

(v)                from 22 January 2002 to at least 31 December 2004:

(a)        Mr Wilton worked at the HVO on a 12 hour shift four panel roster as part of the D crew at the Chestnut Pit, although on at least 15 occasions Mr Wilton did not work because CAO informed Mr Wilton that it did not require him to work on those occasions due to inclement weather or machinery breakdown;

(b)        when Mr Wilton worked at the HVO, Mr Wilton:

            (A)       initially signed a contractor register book, supplied by CAO and located at the entry to the HVO, at the start and the end of each shift;

            (B)       from 22 April 2002, he swiped a card through a computer reader located at the entry of the HVO at the start and at the end of each shift, and affixed a computer generated adhesive sticker (showing his picture, his name, his induction training and his role) to his work gear at the start of each shift;

            (C)       during the hours of the shifts, he was subject to supervision and direction from the same person(s) as other workers on the D crew; and

            (D)       CAO each year provided members of the D crew at the Chestnut Pit with a roster card outlining the planned shifts to be worked by the D crew at the Chestnut Pit for the ensuing twelve month period;

(vi)       at all material times from 6 June 2001 to 31 December 2004:

            (a)        when Mr Wilton was unable to attend work at the HVO due to illness, Mr Wilton:

                        (A)       initially was required to notify both MES and his relevant OCE at the HVO (or, if he was unable to contact his relevant OCE, then the Control Room at the HVO); Mr Wilton also completed a MES ‘Application for Leave’ form in relation to those occasions and submitted the form to MES; a copy of those forms completed by Mr Wilton is Exhibit 1 at pages 590-591;

                        (B)       from about 17 February 2003 was required to communicate with both MES and his relevant OCE at the HVO (or, if he was unable to contact the relevant OCE, the Control Room at the HVO); the relevant OCE then completed a ‘Record of Observation’ form in relation to Mr Wilton’s absence, and provided it to CAO’s Mining Systems Engineer Mr Steve Sargent;

            (b)        when Mr Wilton wished to take recreation leave from the work at the HVO, Mr Wilton:

                        (A)       initially informed his supervisor at the HVO;

                        (B)       completed a MES ‘Application for Payment of Leave’ form and submitted the form to MES; a copy of those forms completed by Mr Wilton are at page 592 of Exhibit 1;

                        (C)       from about August 2004, the MES form he was required to complete (and did complete) and submit, changed to a ‘Notification of Not Being Available for Work’ form; a copy of forms completed by Mr Wilton are at pages 593-596 of Exhibit 1;

            (c)        Mr Wilton sent to MES, per medium of a facsimile machine located at the HVO, a completed MES timesheet, initially countersigned by an OCE at the end of each week, and later countersigned by an OCE at the end of each shift; Mr Wilton then sent the completed timesheet to the MES office by facsimile in order to receive payment for his work; a copy of the completed timesheets are at pages 597-821 of Exhibit 1.

12                  At all material times from 6 June 2001 to 31 December 2004, MES:

(i)                  paid to Mr Wilton wages in respect of the work he performed at the HVO on a weekly basis into his nominated bank account after the deduction of PAYG taxation, superannuation and other authorised deductions;

(ii)                provided to Mr Wilton a payslip each week; a copy of the payslip is Exhibit 1 at pages 822-1017;

(iii)               made superannuation contributions on behalf of Mr Wilton to a superannuation fund nominated by Mr Wilton;

(iv)              sent to Mr Wilton various memoranda, including memoranda concerning the completion and submission of timesheets, the requirement to attend toolbox talks and the requirement to work over certain holiday periods such as Easter and Christmas; a copy of such memoranda is at pages 1018 to 1029 of Exhibit 1;

(v)                conducted monthly occupational health and safety briefings at the HVO which Mr Wilton and other workers attended at the request of MES; and

(vi)              following the end of each financial year for 2001 to 2005 (both inclusive), provided to Mr Wilton a form of ‘PAYG Payment Summary – Individual Non Business’ for inclusion in Mr Wilton’s income tax return, which recorded gross payments made by MES to Mr Wilton in the nature of wages and the income tax deducted in respect of such payments; a copy of the PAYG Payment Summaries completed by MES in respect of Mr Wilton are at pages 1030 to 1034 of Exhibit 1.

13                  Some months after Mr Wilton commenced working at the HVO, MES provided Mr Wilton with a uniform and personal protective equipment to wear during his work at the HVO, following the completion of forms by Mr Wilton requesting the clothing he wished to have issued to him; the clothing and personal protective equipment issued to Mr Wilton bore the MES logo; a copy of the forms completed by Mr Wilton is Exhibit 1 at pages 1035 to 1037.  At or around the same time, MES provided to Mr Wilton a crib bag to use during his work at the HVO.

14                  At all material times from 6 June 2001 to 31 December 2004, CAO:

(i)                  paid MES for the work done by Mr Wilton, based on the number of hours Mr Wilton worked at the HVO;

(ii)                did not deduct tax from the amounts it paid to MES;

(iii)               did not make any wage, superannuation, annual leave, sick leave or other payments to Mr Wilton;

(iv)              did not pay MES for those occasions when Mr Wilton did not attend the HVO;

(v)                did not direct or advise MES as to the quantum of wages or other payments MES made to Mr Wilton;

(vi)              assigned Mr Wilton to work on various pieces of equipment at the HVO, at the start of a shift, by placing his name on a whiteboard next to the type of equipment Mr Wilton was to operate on that shift;

(vii)             supplied the mining equipment which Mr Wilton used during his work at the HVO;

(viii)           arranged for an OCE to be in charge of each shift which Mr Wilton worked;

(ix)              arranged for the nominated OCE to provide a briefing on safety matters, prior to the commencement of each shift, to Mr Wilton and the other workers on the relevant shifts;

(x)                made hearing protection (ear-plugs) available for use by Mr Wilton; and

(xi)              provided instruction on health and safety matters to Mr Wilton (amongst other persons).

15                  At some time during the course of 2002, Mr Wilton signed a MES ‘Employment Undertaking’ form and provided it to MES.  A copy of the form that Mr Wilton submitted to MES formed part of Exhibit 1 at page 1038.  The text of that form was as follows:

‘EMPLOYMENT UNDERTAKING

 

I Kevan Wilton, whilst employed by Mining & Earthmoving Services Pty Limited, understand and agree to meet the following minimum requirements when placed for casual work on a Mining & Earthmoving Services client’s work site:-

 

Ø      Mining & Earthmoving Services Pty Limited and its client’s Policy and Procedure regarding fitness for work.

 

Ø      Mining & Earthmoving Services Pty Limited and its client’s Policy and Procedure regarding Occupational Health and Safety and the care of the environment.

 

Ø      Mining & Earthmoving Services Pty Limited and its client’s Policy and Procedure regarding work ethics, (including time management, attendance, advising of inability to attend for work etc.).

 

Ø      To follow all legal and reasonable directions given to me by Mining & Earthmoving Services Pty Limited client’s nominated person.

 

Ø      To report immediately to Mining & Earthmoving Services Pty Limited and its client any and all accidents, incidents, near misses, dangerous occurrences in which I may be involved, as well as any and all potentially hazardous practices and/or situations I may observe.

 

Ø      To willingly and co-operatively take an active part in any investigation of any accident, incident, near miss and/or dangerous occurrence, whether conducted by Mining & Earthmoving Services Pty Limited or its client or both.

 

Ø      To regard any and all information coming to my certain knowledge, no matter how trivial and/or unimportant that information may be, and whether that information concerns Mining & Earthmoving Services Pty Limited or its client, as absolutely and strictly confidential.

 

I understand and accept that my failure to meet these requirements may jeopardize my continued employment and placement by Mining & Earthmoving Services Pty Limited.  I re-affirm my declaration that I have never signed any agreement with Coal Mines Insurance which would prevent me from working in the Coal mining industry in New South Wales.

 

I agree to accept the rates of pay and conditions actually payable on the particular client’s site to which it is proposed that I am to be placed, (a schedule of which was handed to me to-day) and to the minimum rates and conditions set out in the copy of the Mining & Earthmoving Services Pty Limited Certified Agreement 2001 handed to me to-day.’

 

The reference immediately above to the MES Certified Agreement may be observed. 

16                  On or about 6 May 2003, MES completed a document bearing the heading ‘To Whom It May Concern’ in relation to Mr Wilton; a copy of that document is at page 1039 of Exhibit 1.  On or about 24 July 2003, Mr Wilton completed a form headed ‘Voting form for method of payment’; a copy of that document is exhibited at page 1040 of Exhibit 1.

17                  On or about 1 July 2004, Mr Wilton received a document bearing the title ‘Superannuation Guarantee Contribution Report’; a copy of that document is at page 1041 of Exhibit 1.  On or about 2 July 2004, Mr Wilton received a further document bearing the title ‘Superannuation Guarantee Contribution Report’; a copy of that document is at page 1042 of Exhibit 1.

18                  On 24 November 2004, Mr Wilton submitted a job application form for permanent employment with CAO at the HVO; a copy of that document is at pages 1043 to 1059 of Exhibit 1.

Circumstances in chronological sequence relating to the engagement by MES of Mr Cumberland to the extent mutually acknowledged or not put in issue between the parties

19                  As to particularity of the corresponding circumstances relating to Mr Cumberland’s engagement by MES, the following matters were the subject of agreement between Mr Cumberland and CAO for the purpose of the proceedings (as in the case of Mr Wilton, the complexity of the circumstances of the case requires that all such material be recorded below in these reasons for ease of reference, irrespective of the varying extent of materiality thereof):

(i)                  on or about 1 June 2001 (that is about the same time correspondingly in the case of Mr Wilton), Mr Cumberland completed the same MES form called ‘Registration of Interest – Casual/Temporary Employment’ and submitted that form and his resume to MES (comprising pages 1060 to 1066 of Exhibit 1);

(ii)                on or about 18 June 2001, MES completed Section B of a ‘Tax file number declaration’ form in respect of Mr Cumberland for submission to the Australian Taxation Office; that form completed by MES comprises page 1068 of Exhibit 1;

(iii)               on or about 9 July 2001, Mr Cumberland completed a document bearing the title ‘To Whom It May Concern’ (comprising page 1067 of Exhibit 1), which was in the following terms:

‘I, STEVEN CUMBERLAND who is employed as a Casual Plant operator by Mining and Earthmoving Services Pty Limited, understand and agree to meet the following requirements when placed for casual work on a Mining and Earthmoving Services Pty Limited client work site:-

 

·        The Mining and Earthmoving Services Pty Limited and it’s [sic] client’s Policy and Procedure on Fitness for Work,

 

·        The Mining and Earthmoving Services Pty Limited and it’s [sic] client’s Policy and Procedure on Occupational Health Safety and Environment,

 

·        The Mining and Earthmoving Services Pty Limited and its client’s Policy and Procedure on Work Ethics (including Time Management, attendance, advising inability to attend work etc,),

 

·        To follow all legal and reasonable directions given me by the client’s nominated person,

 

·        To report immediately to client & MES accidents/incidents/ near miss/dangerous occurrences that I may be involved in,

 

·        If involved in accidents/incidents/near miss/dangerous occurrences, I will take part in any investigations when invited to do so.  Even if I have nothing to offer,

 

I understand failure to meet these requirements will jeopardise my employment with Mining and Earthmoving Services Pty Limited.’;

(I observe that this form, which pre-dated a not dissimilar form to that signed by Mr Wilton, was less comprehensive)

(iv)              on or about 11 July 2001, Mr Cumberland at the request and expense of MES:

(a)        attended a Pre-Employment functional capacity evaluation conducted by the Joint Coal Board (‘JCB’) Health Service;

(b)        underwent a drug and alcohol screening test with JCB Health Service;

(v)                on or about 12 July 2001 MES inquired whether Mr Cumberland would be willing to work at the HVO; Mr Cumberland indicated such willingness;

(vi)              on 12 July 2001 Mr Cumberland attended the HVO to undergo induction training in order to work at the HVO; the induction training was carried out in the HVO training room;

(vii)             from about 16 July 2001 to about 18 January 2002:

(a)        Mr Cumberland worked at the HVO on an eight hour shift five days per week roster as part of the B crew at the North Pit, although on at least two occasions Mr Cumberland did not work as CAO informed him that it did not require him to work due to inclement weather or machinery breakdown; and

(b)        when Mr Cumberland did work at the HVO, he signed a contractor register book supplied by CAO located at the entry to the HVO, at the start and end of each shift; and

(c)        during the hours of the shifts that Mr Cumberland worked at the HVO he was subject to supervision and direction from the same person(s) as other workers on the B crew;

(viii)      in January 2002, CAO made all its operations at the North Pit subject to 12 hour shifts;

(ix)       in January 2002, CAO informed Mr Cumberland of the changes to the shifts;

(x)        following the change to the 12 hour shift roster, CAO continued to assign Mr Cumberland to work as part of the B crew at the North Pit;

(xi)       on 14 May 2002, Mr Cumberland signed an MES ‘Employment Undertaking’ form in the same terms as that signed by Mr Wilton already extracted and provided it to MES (comprising page 1069 of Exhibit 1);

(xii)      from 21 January 2002 to at least 31 December 2004:

(a)        Mr Cumberland worked at the HVO on a twelve hour shift four panel roster as part of the B crew at the North Pit, although on at least 13 occasions Mr Cumberland did not work, as CAO informed Mr Cumberland that it did not require him to work on those occasions due to inclement weather or machinery breakdown; and

(b)        when Mr Cumberland worked at the HVO, Mr Cumberland:

            (1)        initially signed a contractor register book, supplied by CAO and located at the entry to the HVO, at the start and end of each shift; but

            (2)        from 22 April 2002, swiped a card through a computer reader located at the entry of the HVO at the start and at the end of each shift, and affixed a computer generated adhesive sticker (showing his picture, his name, his induction training and his role) to his work gear at the start of each shift; and

(c)        during the hours of the shifts that Mr Cumberland worked at the HVO he was subject to supervision and direction from the same person(s) as other workers on B crew;

(d)       CAO each year provided members of the B crew at the North Pit with a roster card of the planned shifts to be worked by the B crew for the next 12 month period;

(xiii)      at all material times from 12 July 2001 to 31 December 2004:

            (a)        when Mr Cumberland was unable to attend the work at the HVO due to illness, Mr Cumberland:

                        (1)        initially was required to notify both MES and his relevant OCE at the HVO (or, if he was unable to contact the relevant OCE, the Control Room at the HVO); Mr Cumberland also completed a MES ‘Application for Leave’ form in relation to those occasions and submitted the form to MES; and

                        (2)        from about August 2004 was required by MES to contact both MES and his relevant OCE at the HVO (or, if he was unable to contact the relevant OCE, the Control Room at the HVO); the relevant OCE then completed a ‘Record of Observation’ form in relation to Mr Cumberland’s absence and provided it to CAO’s Mining Systems Engineer, Mr Steve Sargent;

            (b)        when Mr Cumberland wished to take recreation leave from the work at the HVO, Mr Cumberland:

                        (1)        initially informed his supervisor at the HVO;

                        (2)        completed a MES form ‘Application for Payment of Leave’ form and submitted the form to MES; and

                        (3)        from about August 2004 the MES form he was required to complete (and did complete) changed to a MES ‘Notification of Not Being Available for Work’ form; a copy of forms completed by Mr Cumberland comprise pages 1070 to 1073 of Exhibit 1; and

            (c)        Mr Cumberland sent to MES, via a facsimile machine located at the HVO, a completed MES timesheet, initially countersigned by an OCE at the end of each week, and later countersigned by an OCE at the end of each shift; Mr Cumberland had an OCE sign the completed timesheet and then sent it to the MES office by facsimile in order for payment to be made for his work; a copy of the completed timesheets comprise pages 1074 to 1239 of Exhibit 1;

(xiv)     on 10 March 2003, Mr Cumberland completed an MES form authorising and directing that his statutory superannuation contributions be made to COALSUPER fund; a copy of the form completed by Mr Cumberland comprises page 1240 of Exhibit 1;

(xv)      at all material times from 12 July 2001 to 31 December 2004, MES:

(a)        paid to Mr Cumberland wages in respect of the work he performed at the HVO on a weekly basis into his nominated bank account after the deduction by MES of PAYG taxation, superannuation and other authorised deductions;

(b)        provided Mr Cumberland with a payslip each week; a copy of the payslips comprise pages 1241 to 1403 of Exhibit 1;

(c)        made superannuation contributions on behalf of Mr Cumberland to a superannuation fund nominated by Mr Cumberland;

(d)        sent to Mr Cumberland various memoranda, including memoranda concerning late attendance to rostered toolbox talks, the completion and submission of timesheets, the requirement to attend toolbox talks and the requirement to work over certain holiday periods such as Easter and Christmas; a copy of such memoranda comprises pages 1018 to 1029 of Exhibit 1;

(e)                conducted monthly occupational health and safety briefings at the HVO which Mr Cumberland and certain other workers at the HVO attended; and

(f)                 following the end of each financial year in 2003, 2004 and 2005, provided to Mr Cumberland a ‘PAYG Payment Summary – Individual Non Business’ for inclusion in Mr Cumberland’s income taxation return which recorded gross payments made to Mr Cumberland in the nature of wages and the income tax deducted in respect of such payments; a copy of the PAYG Payment Summaries completed by MES in respect of Mr Cumberland comprise pages 1404 to 1406 of Exhibit 1;

(xvi)     after approximately six weeks working at the HVO, MES provided Mr Cumberland with a uniform and personal protective equipment to wear during his work at the HVO, following the completion of a form by Mr Cumberland requesting the clothing he wished to have issued to him; the clothing and personal protective equipment issued to Mr Cumberland bore the MES logo; a copy of the forms completed by Mr Cumberland comprise pages 1407 to 1408 of Exhibit 1; at or around the same time, MES provided to Mr Cumberland a crib bag to use during his work at the HVO;

(xvii)     at all material times from 12 July 2001 to 31 December 2004, CAO:

(a)                paid MES for the work done by Mr Cumberland, based on the number of hours worked at the HVO;

(b)               did not deduct tax from the amounts it paid MES;

(c)                did not make any wage, superannuation, annual leave, sick leave or other payments to Mr Cumberland;

(d)               did not pay MES for those occasions when Mr Cumberland did not attend the HVO;

(e)                did not direct or advise MES as to the quantum of wages or other payments MES made to Mr Cumberland;

(f)                 assigned Mr Cumberland to work on various pieces of equipment at the HVO, at the start of a shift, by placing his name on a whiteboard next to the type of equipment Mr Cumberland was to operate on that shift;

(g)                supplied the mining equipment which Mr Cumberland used during his work at the HVO;

(h)                arranged for an OCE to be in charge of each shift which Mr Cumberland worked;

(i)                  arranged for the nominated OCE to provide a briefing, prior to the commencement of each shift to Mr Cumberland and the other workers on the relevant shifts on safety matters;

(j)                 made hearing protection (ear-plugs) available for use by Mr Cumberland; and

(k)               provided instruction on health and safety matters to Mr Cumberland (amongst other persons);

(xix)     on 11 March 2004, Mr Cumberland signed a document entitled ‘Authorisation’ which authorised the Construction Forestry Mining and Energy Union to represent him in matters relating to his employment; a copy of the Authorisation is exhibited at page 1409 of Exhibit 1;

(xx)      on 17 March 2004, a ‘Notice Under a Dispute Settling Procedure in an Agreement’ was lodged with the Australian Industrial Relations Commission on behalf of Mr Cumberland and certain other persons; a copy of the Notice is exhibited at page 1410 of Exhibit 1;

(xxi)     on or around 1 July 2004, Mr Cumberland received a document bearing the title ‘Superannuation Guarantee Contribution Report’ for the quarter 1 January to 31 March; a copy of that document is exhibited at page 1411 of Exhibit 1; on or around 2 July 2004, Mr Cumberland received a further document bearing the title ‘Superannuation Guarantee Contribution Report’ for the period 1 April to 30 June; a copy of that document is exhibited at page 1412 of Exhibit 1;

(xxii)     on 29 November 2004, Mr Cumberland submitted a job application form for permanent employment with CAO; a copy of the job application is exhibited at pages 1413 to 1424 of Exhibit 1.

MES Certified Agreement 2004 and related written material further provided or otherwise sent by MES to each of Mr Wilton and Mr Cumberland

20                  The following documentation of the foregoing description was provided by MES:

(i)                  on or around 8 April 2004, each of the applicants received a document from MES entitled ‘Mining & Earthmoving Services Pty Ltd Certified Agreement 2004 Draft 08.04.2004’; a copy of that document is exhibited at pages 1425 to 1439 of Exhibit 1;

(ii)                on 5 May 2004, each of the applicants received a memorandum from MES in relation to the representation of MES casual operators working on the HVO mine site; a copy of the memorandum is exhibited at page 1440 of Exhibit 1;

(iii)               on 22 November 2004, each of the applicants received a letter from MES enclosing a draft certified agreement; a copy of the letter and that attachment are exhibited at pages 1441 to 1458 of Exhibit 1;

(iv)              on 11 March 2005, each of the applicants received a letter from MES enclosing a proposed certified agreement; a copy of the letter and that attachment are exhibited at pages 1459 to 1476 of Exhibit 1;

(v)                at some time between 1 June 2001 and 31 December 2004, each of the applicants received from MES a document bearing the title ‘MES certified agreement discussions schedule’; a copy of that document is exhibited at page 1477 of Exhibit 1;

(vi)              during 2004, Mr Cumberland received from MES a document bearing the title ‘Mining and Earthmoving Australian Workplace Agreement (AWA)’; a copy of that document appears at pages 1478 to 1489 of Exhibit 1;

(vii)             at some time after 25 August 2003, Mr Wilton received from MES a document entitled ‘Fitness for Work’; a copy of that document is exhibited at pages 1490 to 1499 of Exhibit 1;

(viii)           at some time between 23 August 2002 and 31 December 2004, each of the applicants received from MES a document entitled ‘Introduction of Drugs & Alcohol Testing in the Workplace’; a copy of that document is exhibited at page 1500 of Exhibit 1.

The relief sought by the applicants against Coal & Allied Operations Pty Ltd (‘CAO’) and the issues raised by the applicants and CAO respectively in relation thereto

21                  I have already extracted the full text of the relief sought by each of the applicants against the respondent CAO pursuant to the WR Act and the Federal Court of Australia Act (Cth) (‘the Act’); the monetary significance of that extensively framed relief may be summarised as follows:

(i)                  declarations that CAO breached the terms of the 2000 Agreement in that for the period of time from 1 July 2002 to 30 June 2003, CAO failed to make payment to each of the applicants of the annual salary as required by cl 19 of that Agreement;

(ii)                declarations that CAO breached the terms of the 2003 Agreement in that for the period of time from 1 July 2004 to 31 December 2004, CAO failed to make payment to each of the applicants of the annual salary as required by cl 17 of that Agreement;

(iii)               orders that CAO make payment to the respective applicants of the relevant amounts in satisfaction of the asserted underpayments together with interest thereon, being in the case of Mr Wilton the sums of $4,697.00 and $12,845.31 in relation to those successive periods and in the case of Mr Cumberland the sums of $8,410.00 and $20,531.20 in relation to those successive periods;

(iv)              orders by way of imposition of penalties upon CAO for breaching each of the said Agreements and that the penalties be paid to the respective applicants pursuant to s 356 of the WR Act. 

22                  The basis for those claims, as I have foreshadowed, was that at all material times each of the applicants was an employee of CAO according to law, both in substance and reality, and was entitled to the remuneration and conditions provided for in the 2000 and 2003 Agreements respectively.  Clauses 4 and 6 of each of those Agreements were said to be in similar terms, being substantially to the following effect:

‘4.        Parties to the Agreement

                        The parties to the agreement are

                        ·     Coal & Allied Operations Pty Limited (the Company);

                        ·     The Construction, Forestry, Mining & Energy Union (Union);

                        ·     The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.

                        This agreement applies to employees of the company performing production and engineering work.

                        This agreement does not apply to any production or engineering employee employed under an Australian Workplace Agreement (AWA).  All AWAs operate to the exclusion of this agreement.’

            …

                        This agreement applies to and binds all employees whose employment is currently subject to the Coal Mining Industry (Production and Engineering) Consolidated Award 1997.’

The term or description ‘employee’was not defined in either Agreement.  Both Agreements were certified under the so-called ‘pre-reform’ WR Act, s 4 whereof defined ‘employee’as follows:

‘employee includes any person whose usual occupation is that of employee, but does not include a person who is undertaking a vocational placement.’

23                  The applicants framed the issue arising for resolution in the proceedings as ‘whether at the relevant times the relationship between each of the applicants and the respondent [was an] employment relationship’, having regard to what the applicants described as ‘the facts as to the total employment relationship’.  It was contended that such relationship took effect from the time of their engagement to work at the HVO, or at least some time prior to 1 July 2002, that being in effect the commencement of the claim.  In that regard it was pointed out that English authority, which I will later address in detail, has established that ‘[c]onduct which might not have manifested a mutual intention to enter a contract had it lasted only a brief time may become unequivocal if it is maintained over a lengthy period of time’. 

24                  CAO postulated the two issues necessarily arising for resolution by reason of or inherent in the subject claims made by the applicants Mr Wilton and Mr Cumberland against CAO, as follows:

(i)                  whether CAO and each of the applicants were in a contractual relationship; and

(ii)                if that issue be answered affirmatively, whether CAO was in an employment relationship with each of the applicants respectively. 

CAO exposed as the critical consideration arising in the context of the resolution of those issues the function relevantly of MES as a labour hire entity and the respective standings in law (if any) of each of the applicants Messrs Wilton and Cumberland in relation to MES on the one hand, and in relation to CAO on the other.  It was in the context of those critical considerations that each of the parties drew attention to many legal authorities and to the operation or otherwise thereof in relation to the circumstances of this case.

25                  The evidence adduced by the respective parties to the proceedings was extensive, being evidence largely additional to those mutually agreed facts and circumstances I have already recorded in these reasons.  The differences in approach of the parties to the significance of those facts and circumstances resided partly in relation to the inferences open to be drawn from circumstances which were substantially common ground.

Principles governing the juridical approach to determination of the existence or otherwise of an employment relationship – authorities cited by the applicants

26                  The applicants cited a number of authorities bearing upon the principles for determination of the existence or otherwise of an employment relationship.  The first was the dicta of Wilson and Dawson JJ (of course as members of the High Court of Australia)in Stevens v Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16 at 36-37, the immediate context there being an issue as to the vicarious liability in tort of a sawmiller for its independent contractors as distinct from its employees:

‘The other indicia of the nature of the relationship have been variously stated and have been added to from time to time.  Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like.  Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax.  None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.

Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant.  The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance.’

In the present context however there is no issue arising as to the status of the applicants as employees per se, but rather whether each was employed at the material times by CAO as the applicants contended, rather than by MES as the labour hire agency.  It may be accepted that the contractual arrangements in operation as between CAO and MES at the material times are not determinative per se of the characterisation relevantly of the relationship in place between each of the applicants on the one hand and CAO on the other, though such arrangements were not of course irrelevant. 

27                  In Hollis v Vabu Pty Limited (2001) 207 CLR 21 at 31-32, to which I was next referred by the applicants, the need for caution in relying on earlier authorities relating to vicarious liability in tort, for the purpose of determining the existence or otherwise of an employment relationship in a business or industrial setting, appears at the threshold of the reasons for joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ.  The circumstances of that case concerned a courier business involved in the delivery by couriers of articles on bicycles on the basis of payment of fixed rates for each assignment, and in relation to which the High Court established (by a majority of five Justices to one) the existence of a relationship of employer and employee, contrary to the decision below of the New South Wales Court of Appeal.  The following considerations addressed in that majority joint judgment at [48]-[50], to which attention was drawn by the applicants, were found to require the conclusion that:

‘48.      First, these couriers were not providing skilled labour or labour which required special qualifications.  A bicycle courier is unable to make an independent career as a free-lancer or to generate any “goodwill” as a bicycle courier.  The notion that the couriers somehow were running their own enterprise is intuitively unsound, and denied by the facts disclosed in the record.

49.       Secondly, the evidence shows that the couriers had little control over the manner of performing their work.  They were required to be at work by 9 am and were assigned in a work roster according to the order in which they signed on….  The evidence does not disclose whether the couriers were able to delegate any of their tasks or whether they could have worked for another courier operator in addition to Vabu during the day.  It may be thought unlikely that the couriers would have been permitted by Vabu to engage in either activity.

50.       Thirdly, the facts show that couriers were presented to the public and to those using the courier service as emanations of Vabu.  They were to wear uniforms bearing Vabu’s logo.’

The issue here arising is one step removed from Hollis, in that it is not in issue that Messrs Wilton and Cumberland did not have the status of employees per se instead of that of independent contractors.  The issues here involved boil down to identification of the employer of the applicants Messrs Wilton and Cumberland, whether being CAO as contended by the applicants or MES as contended by CAO, in the context of MES’s function of labour hire.  Nevertheless as I have also foreshadowed, the jurisprudence emerging from cases involving directly the issue as to whether an entity conducting a business retained a particular person as an employee, or else engaged that person as an independent contractor, contain judicial dicta which may assist the resolution of those issues so arising in the present context. 

28                  The issue here arising, as to whether or not a contract of employment was mutually intended to be established between the applicants and CAO, was emphasised by the applicants in any event to fall for determination by the Court objectively, and in that regard at least largely by inference from the conduct of the relevant parties, as exemplified in the following dicta of Gaudron, McHugh, Hayne and Callinan JJ appearing in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25], shortly after the High Court’s decision in Hollis:

‘Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so.  Because the search for the “intention to create contractual relations” requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules.  Although the word “intention” is used in this context, it is used in the same sense as it is used in other contractual contexts.  It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened.  It is not a search for the uncommunicated subjective motives or intentions of the parties.’

The circumstances in Ermogenous related to the engagement of a minister of religion, and hence were somewhat distant from the industrial context here involved, and in addition there was not present as here the competing element of the existence of a third party.  Nevertheless the emphasis there given to the need to take account of the subject matter of a relevant agreement, the status of the parties thereto, their relationship to another, and other surrounding circumstances are factors of present importance.  I would add reference to the need for the determination objectively of the mutual intention of the contracting parties, evidence of mere subjective intention being usually of controversial weight. 

29                  The applicants emphasised in the course of submissions that the present case did not involve the need for the Court to focus on all of the persons engaged by CAO on its mine site in the Hunter Valley, whether through contractors inclusive of MES, but rather must address the circumstances of the applicants in their interaction with and otherwise in relation to CAO.  I was referred to the earlier case of Dalgety Farmers Ltd t/as Grazcos v Bruce (1995) 12 NSWCCR 36 at 46, where Kirby A-CJ (as he then was), with whom the other members of the New South Wales Court of Appeal agreed, observed generally in relation to an issue as to tortious liability of an employer:

‘Determining whether employment exists, and if so with which person or organisation, is often a difficult task.  It involves the characterisation of the essence of a relationship by reference to given criteria.  It frequently results (as cases both in Australia and elsewhere illustrate) in borderline decisions upon which different legal minds, properly instructed, can reach different conclusions.’

I would draw attention to his Honour’s emphasis above upon the need for ‘characterisation of the essence of a relationship’ under scrutiny.  The context to Dalgety Farmers related to the labour hire of shearers undertaken by an organising entity for pastoralists. 

30                  In the course of proceedings earlier in the Victorian Court of Appeal in The Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) (1997) 97 ATC 5070, Winneke P, with whom J D Phillips and Kenny JJA agreed, said at 5074 as to the nature of the evidentiary approach to imputation of the liability of an employer to pay pay-roll tax as follows:

‘The exercise is not, as Tadgell, JA. observed in Green v Victorian Workcover Authority [1997] 1 VR 364 at 375 “a mechanical one”.  Rather it is a matter of obtaining the overall picture from the accumulation of detail.  Tadgell, JA described the exercise by citing, with approval, a passage from the judgment of Mummery, J. in the case of Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944 where his Lordship said of a determination whether a person was a servant or independent contractor:

            “This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation.  The object of the exercise is to paint a picture from the accumulation of detail.  The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered qualitative appreciation of the whole.  It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.  Not all details are of equal weight or importance in any given situation.  The details may also vary in importance from one situation to another.”

… .’

The juridical approach there described blends constructively with those notions appearing in other authorities I have cited in the course of these reasons, each accommodating varying or different features but nevertheless attracting at least broadly the operation directly or indirectly of not dissimilarly expressed principles. 

31                  It was submitted by the applicants in the light of the foregoing authorities that in determining whether each of them is entitled to the relief sought in the present proceedings against CAO, it is necessary to consider the total relationship between the applicants and CAO, and hence all the facts and circumstances bearing upon the applicants’ particular employment.  In so doing, it was further submitted that the Court is entitled to have regard to conduct that occurred after the relationship commenced.  I was referred to what was observed by Heydon JA (as he then was) in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164, commencing, ‘The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed’, his Honour thereby citing authority, commencing with Howard Smith & Company Limited v Varawa (1907) 5 CLR 68 at 77, in the context of his discussion of principles of contract formation.  Further in Brambles at 177 on the subject of limitations upon an offer and acceptance analysis, Heydon JA adopted the following dictum of the New South Wales Court of Appeal in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,118 (McHugh JA with whose reasons Hope and Mahoney JJA concurred) :

‘Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled.  Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties.  In any dynamic commercial relationship new terms will be added or will supersede older terms.  It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.’

It would be somewhat of an overstatement to describe the present context as involving a ‘dynamic commercial relationship’, but nevertheless the foregoing dictum is by no means out of place in the present context. 

32                  The applicants cited extensively from the Full Federal Court judgments in Damevski v Giudice and Others (2003) 133 FCR 438, where the unanimous conclusion of Marshall, Wilcox and Merkel JJ was to the effect that the purported restructure of a cleaning operation from that of former employees to their ongoing provision of cleaning services as contractors, but nevertheless still engaged by their former employer as a principal to the ongoing controversial relationship, did not operate to terminate the pre-existing contracts of employment for the purpose of the operation of the WR Act, no change having occurred in any physical sense to the work activities of the purported contractors from what had previously been undertaken by them as employees.  I would interpolate to observe that no such restructure of any existing employment relationship of relevance took place in the present context, and care therefore needs to be taken in relation to any application to the principled approach there taken.  The extensive reasons for judgment of Marshall J (with whom Wilcox J agreed whilst adding observations of his own) included emphasis at [86] upon the practical difficulty of locating or demonstrating an offer and acceptance in the traditional sense in the kind of context for instance there involved, his Honour pointing to what was further observed by McHugh JA in Integrated Computer Services concerning the difficulty of fitting ‘a commercial arrangement into the common lawyers analysis of a contractual arrangement’, and moreover as to the need to distil ‘the precise moment when the legal criteria of a contract have been fulfilled’, given that ‘[i]n a dynamic commercial relationship new terms will be added or will supersede older terms.’  As McHugh JA had also emphasised, it is necessary ‘… to look at the whole relationship and not only at what was said and done when the relationship was first formed’.  In the present case, however, the framework of the relationship between the applicants and CAO stood still relevantly from the outset, as it were. 

33                  At 456-7 of Damevski, Marshall J made the following findings within [92], [96], [101] and [102], to which counsel for Messrs Wilton and Cumberland drew attention with emphasis, and which I will further reproduce below:

‘[92]   Counsel for Endoxos relied upon the requirement for an intention to create legal relations to assert that there was no evidence of a legally enforceable contract.  Subject to a rebuttal, it will be presumed in commercial agreements that the parties intend to create legal relations.  Although the hiring agreement indicates Endoxos set about making arrangements to obtain its labour through MLC, this is not a clear rebuttal.  Relationships can be established outside the hiring agreement.  The hiring agreement cannot be determinative of the intentions of Endoxos and Mr Damevski to create legal relations.

…

[96]    Endoxos may have set about making arrangements for the provision of labour through a third party, but ultimately it acted in a way that showed that it in fact intended to create legal relations.  The evidence indicates that Endoxos wanted to maintain control of Mr Damevski, expected him to use their equipment and clothing emblazoned with Endoxos livery and, ultimately, wanted to be able to dismiss Mr Damevski.

…

[101]  Although Endoxos had an intention to remove costs related to its role as an employer (such as increases in public liability insurance premiums), through its actions it also displayed an intention to establish a contractual relationship with Mr Damevski after his “resignation” on 19 August 2001.  Endoxos directed Mr Damevski to worksites, called Mr Damevski to its offices for further instructions when necessary, gave Mr Damevski attire and equipment to enable him to perform work, and received pay slips from him. Mr Damevski also showed an intention to re-enter the legal relationship with Endoxos, by once again taking up the role he held with Endoxos before 19 August 2001.

[102]  The facts of this case also reveal that the contractual relationship that existed between Mr Damevski and Endoxos was one of employee and employer.  As previously pointed out, the only difference between the relationship before and after 19 August 2001 was that MLC was given the role of paymaster.’

In the present case, the applicants did indeed use only CAO machinery, but as I have also pointed out, it was MES which issued each of them with both clothing and protective equipment. 

34                  The reasons of Merkel J for concurrence with Wilcox and Marshall JJ in the outcome in Damevski revealed a varied approach from that of Marshall J undertaken at length, albeit variations which Wilcox J doubted to involve any ‘difference [that] matters very much’ (see [2] at 441).  Nevertheless as his Honour also explained, care needs to be taken in applying principles along the lines of re-structured existing employment relationships from those of the purported hiring of employees from the outset.  After pointing out in his conclusions at [173] that ‘[i]n general, the Courts have held that the interposition of a labour hiring agency between its clients and the workers it hires out to them does not result in an employee-employer relationship’, Merkel J reached the following conclusions at [174]:

‘However, the present case differs in significant respects from those cases. In those cases, in general, the hiring agency interviewed and selected the workers, and determined their remuneration, without reference to the client. Usually, a client requesting a worker with particular skills was provided with one, who may or may not have been “on the books” of the hiring agency at the time the order was placed.  The workers of such hiring agencies were usually meant to keep the agency informed of their availability to work, and in many cases were not to agree to undertake work for the client which had not been arranged or directed by the hiring agency.  Equipment was either supplied by the worker themselves [sic] or by the hiring agency, except for specialist safety equipment which the client often supplied.  Dismissal of a worker was only able to be effected by the hiring agency. The client can only advise the hiring agency that the particular worker is no longer required by it.  Had AICA/MLC acted as a labour hiring agency for Damevski to contract his services to other cleaning companies, as suggested in the chart and in the information pack, then the decisions in the above cases may have been applicable to this situation. However, that did not eventuate in the present case.’

In the present case however, the business of MES was indeed (and presumably remains) in the nature of a ‘hiring agency’,and MES retained its personnel on its own employment books of record when hiring them to third parties at arm’s length, and had done so apparently for some time in the context of mining operations in particular in the Hunter Valley such as those undertaken by CAO.  The MES arrangements did not of course arise out of internally restructured employment arrangements, whether designed to obviate employment regulation, such as occurred for instance in Damevski.

35                  The mutually acknowledged need for caution in placing reliance upon litigated precedents, in the context of deciding if there exists an employment relationship in the circumstances of a particular subsequent case, was emphasised in Hollis,where at [31] of the reasons for the joint judgment of the High Court to which I have already made reference,the following further appears:

‘The concession in the Court of Appeal was one as to a proposition (more accurately, a conclusion) of law alone, and not as to the facts on which that proposition rested.  In Zuijs v Wirth Brothers Pty Ltd, the same concession had been made in the New South Wales Supreme Court but was held not to stand in the way of this Court hearing argument and, indeed, holding to the contrary on appeal.  Moreover, it has not been demonstrated that any substantial prejudice would result to Vabu in allowing Mr Hollis now to argue this point.  All the facts necessary for determination of the question were adduced and proved at trial and no new fact is sought to be or needs to be raised.  Further, one might have thought that, as a practical matter, there would have been considerable obstacles in the path of any challenge to the finding of a relationship of principal and independent contractor at trial or in the Court of Appeal because it would have been contrary to the prior holding of the Court of Appeal in the taxation decision.’

It was asserted on behalf of the applicants that the present case was not an instance ‘… where the Court needs to focus on all of the persons engaged by [CAO] through contractors or even all the persons engaged by [CAO] through MES’, but rather was an instance which ‘requires the Court to focus on the circumstances of the two applicants in their interaction with [CAO]’.  Nevertheless I did not understand the applicants to distil, by way of any detailed or definitive description, the existence of any material difference between the arrangements made between MES and CAO for the utilisation of the services of Mr Wilton or Mr Cumberland and those of other workers introduced by MES to CAO, for what that might matter. 

36                  I should add in any event that the applicants drew attention to what appears in the joint reasons for judgment of Brennan CJ, Dawson and Toohey JJ in Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 420-421, as follows:

‘A right to the payment of award rates is imported by statute into the employment relationship, which is contractual in origin, and, express promise apart, it is only in that sense that it can be said that award rates are imported into the contract of employment. 

In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award and, as we have said, the award operates with statutory force to secure those terms and conditions.’

And at 436 McHugh and Gummow JJ further observed:

‘The evolution in the common law as to the relationship of employment has been seen as a classic illustration of the shift from status (that of master and servant) to that of contract (between employer and employee).’

Circumstances beyond the scope of evidentiary common ground – the operation of the mining equipment of CAO by the applicants and related matters

37                  It was common ground between the parties that members of the mining crews, such as those whereof each of the applicants were respectively members from time to time, undertook exclusively for CAO similar duties involving the driving and operation of CAO’s heavy mining equipment at the HVO.  The applicants submitted that they were engaged in such work at CAO over approximately four years from June/July 2001 to April/May 2005.  For that purpose they were provided by CAO at 12 monthly intervals with rosters which allocated them to designated crews and indicated their working times to apply for the ensuing year.  Their respective periodic shifts rotated at weekly intervals from day shifts to night shifts, including weekends on the basis of payment of overtime.  On occasions the applicants worked seven days in a given week.  Timesheets in evidence filled out on MES forms provided to each applicant for completion reveal that Mr Wilton worked an average of 49 hours per week in the period of time up to 20 January 2002, and Mr Cumberland worked an average of 43 hours per week over a similar time.  It was pointed out by CAO that the fact that the applicants performed duties similar to certain CAO employees was not surprising, given that CAO sought to achieve uniform levels of production, and further that it was efficient as well as safe for the applicants to work in the same physical contexts as CAO’s employees. 

38                  From January 2002 onwards the shifts worked by the respective applicants were restructured.  Each of the applicants was required to work a 12 hour shift roster rather than the eight hour roster previously in operation.  MES timesheets filled out by each applicant were said by the applicants to show that 12 hour shifts were worked on two, three, four and sometimes five times per week, being rostered on any of the seven days of the week.  An analysis of timesheets compiled after 20 January 2002, that is, after the applicants had been working 12 hour shifts, demonstrated that from that time until 15 May 2005, Mr Wilton worked on average 40 hours per week, and from 20 January 2002 until 26 December 2004, and Mr Cumberland worked an average of 36 hours per week.

39                  A typical shift and its incidents, as worked by Mr Wilton at the HVO, were described by him sequentially as follows:

(i)                  he travelled to work in his own time and as part of a ‘car pool’ with other workers engaged on his shift;

(ii)                prior to starting work he changed into his work gear at the bathhouse located at the HVO;

(iii)               he then reported to the muster room, and until sometime in 2002, ‘signed on’ to his shift in a folder provided by CAO; after that time he swiped a card into an electronic reading device;

(iv)              he went next to his crew room to ascertain from a whiteboard, which contained daily work allocations for each crew, what machine he was to operate, where it was located and how he would be transported to that machine;

(v)                thereafter he attended a meeting of his crew addressed by a supervisor as to work allocations for the day, and other matters including safety matters, incidents in the pit and the shift plan; the supervisor also addressed questions from the crew;

(vi)              if working a night shift, he may also have been required to attend a meeting about the 24 hour plan for the mine in operation for the time being;

(vii)             following the meeting he would be conveyed to the mining machinery that he was required to operate that day;

(viii)           he would usually be assigned to operate a truck, dozer or loader;

(ix)              before entering upon actual work performance, he would undertake a safety check of the machine to which he was assigned;

(x)                he logged onto a computer network on the machine which was linked to a so-called GPS monitoring system; that network was connected to a control room operated by CAO; each task that he was required to complete was relayed from the control room via the network to the computer screen for the mining equipment;

(xi)              he moved the machinery to different areas of the pit to perform functions associated with the mining process; for example, if he was to operate a dump truck, his tasks would involve moving the truck to the appropriate parts of the mine to load and unload dirt and/or Coal;

(xii)             as each task was completed, he made an entry on his on-board computer and would then be allocated his next task;

(xiii)           whilst working, he would interact with others working in the mine by communicating per medium of a two way radio; thus during his shift he would communicate with the central control room, his supervisors, other members of the crew, and others working in the mine;

(xiv)           at the completion of his shift, he would ‘log off’ the computer, and would then be transported from his machine to the muster area where he would sign off or ‘swipe off’ and have his timesheets signed by his supervisor; and

(xv)            he would then proceed to the showers with the other workers on the shift and thereafter travel home in his car pool.

40                  Mr Cumberland described a typical shift during which he worked in similar terms.  More significantly, so did Mr Thompson, an acknowledged employee of CAO at the HVO since 1979.  Mr Thompson testified to the effect that his typical shifts involved a similar system of work to those undertaken by each of the applicants.  He was thus subjected to similar supervision to that applicable to the applicants.  CAO pointed out nevertheless that the fact that the applicants performed similar duties to Mr Thompson was ‘not surprising’, given that CAO sought to achieve projected levels of production, and that it was more efficient and safe for the applicants to work in the same manner as CAO’s employees.  Those circumstances did not however operate to establish a relationship between CAO and each of the applicants as one of employment, so CAO submitted. 

41                  The mining equipment used by each of the applicants was supplied and maintained by CAO; some personal protective equipment was additionally supplied to the applicants by MES.  It was the case of the applicants that CAO had ‘overarching responsibility for the provision of personal equipment’; my attention was drawn by the applicants in that regard to the Coal Mines (General) Regulation 1999 (NSW) (‘CMG Regulation’), since repealed and replaced from 23 December 2006 by similar provisions, cl 79 whereof until then providing as follows:

‘79.      Personal protective equipment

            (1)        Appropriate types and quantities of personal protective equipment must be provided to all persons required to work or travel at a mine or declared plant.

            (2)        Such equipment must be maintained in good working order;

            (3)        Persons provided with any such equipment must be trained in its use.’

Since however the CMG Regulation applied ‘to all persons required to work or travel at a mine’, reference thereto did not seemingly advance decisively the applicants’ case.  

42                  As to the matter of so-called ‘time off’, it was mutually agreed between the parties that the applicants would be stood down by CAO for any day when work could not be performed due to bad weather or the unavailability of machinery.  Standing down would occur before commencement of a shift by way of CAO communicating directly with each applicant, or during the course of a shift whereby a supervisor at the mine would send home the affected applicant.  Mr Israel, who was a supervisor employed by CAO at the HVO, testified that it was his decision to stand down members of his crew due to bad weather, or the unavailability of machinery, and that he would inform the so-called ‘Contractor personnel’ of his decision; he testified that it was not his practice to inform MES of his decision in that regard.  However what CAO emphasised on that score was that ‘no leave benefits, or benefits by way of paid time off, were given by CAO to either of the [a]pplicants’. 

43                  Both the applicants testified that when they wished to take any form of leave, they were required to notify CAO in the case of sick leave, or request leave from CAO in the case of annual or other leave.  It was common ground that when either of the applicants was unavailable for work due to illness, he was required to notify the relevant OCE (the abbreviation of course for ‘Open Cut Examiner’) stationed at the HVO, as well as MES.  In that regard, a document headed ‘Mining and Earthmoving Services Pty Ltd Toolbox Meetings Hunter Valley Operations’ dated 26 July 2001 and presented by the affidavit evidence of Mr Touzell, who was employed by MES from 7 May 2001 to 12 August 2004 as the Occupational Health and Safety and Environmental Co-ordinator for MES, states as follows:

‘1.0      Attendance to Work

 

  1.1     If for any reason you cannot attend work please advise your [HVO] representative with as much advance notice as you can give.

 

  1.2     In times when no prior notice can be given please advise the HVO representative as soon as possible after normal starting time.

 

  1.3     Please advise MES as soon as possible on the day.’

 

A memorandum dated 6 November 2002 from Mr Touzell of MES addressed to ‘all Employees’, copied to five CAO officers and headed ‘Attendance At Work’, explained ‘… the obligations of employees in regards to advising MES and its client of the inability to be present at work’; the purpose of the requirements was explained as:

‘… not to deprive our employees of leave but to ensure the client has sufficient personnel to man its operation.  Both MES and its clients recognise the need for recreation and sick leave and will do the best in ensuring you have this leave for whatever reason.

 

In most instances approval of leave by the client is seen as automatic approval by MES.’

44                  The observation made by CAO on the foregoing work practices was that it was ‘hardly surprising’, in the operation of a mine and in the organisation of working crews comprising some persons not regarded by CAO as its employees, that in the event of any such latter category of persons not wishing to attend the HVO on any day or days as part of a crew, CAO would need to be notified as an incident to its conduct of the HVO.  The respondent submitted that ‘it would be impossible to conduct an efficient commercial operation without such notification’. 

45                  The practice for taking recreation leave involved the initial indication to that effect by the contractually hired person (such as Mr Wilton or Mr Cumberland) to the CAO supervisor at the HVO, and the completion of an MES ‘Application for leave form’, subsequently changed to a ‘Notification of not being available for work’ form, and the submission thereof to MES.  Evidence was given by CAO’s Mr Israel that amongst the ‘variety of duties’ he undertook was to ‘… manage leave… within my crew’.  Mr Touzell of MES testified as to the operation of ‘the leave system’.  He agreed that ‘the MES people were put at the bottom of the pecking order’ in terms of the operation of ‘the leave system’, in that ‘… they could only take their leave if sufficient Coal and Allied people were on duty’, and further that ‘… Coal and Allied permanent employees received preference in filling the limit of how many people per crew could [have] leave at any one time…’. 

Supervision of the applicants in the course of their respective working activities in the context of the Hunter Valley Operations (‘HVO’) – statutory and regulatory requirements as to mine management

46                  Upon the subject of supervision of the applicants by CAO and its employed officers, I have already recorded the mutually agreed fact that the applicants were subject to supervision and direction from the same person or persons as other workers engaged on the same crew, and who were what may be neutrally described for convenience as formally or officially in the employ of CAO.  It was submitted on behalf of the applicants that ‘[t]he day-to-day supervision of the crews by [CAO’s] supervisors had two aspects’, being:

‘a.        supervision of safety which was governed by Coal mining specific safety legislation which required that all employees be under the control of safety officials; and

 

b.         general supervision of the productivity and performance.’

 

In relation to those activities, it was emphasised on behalf of the applicants that the CMR Act ‘regulated all Coal mines in New South Wales’ and constituted ‘associated legislation’ for the purposes of the OHS Act, and further that the CMR Act ‘required that a management structure be in place at a Coal mine which includes various appointed officials and sets out the responsibilities of various persons appointed to those positions’.  I have earlier referred generally to CAO’s employment of at least one Mine Manager at the HVO and to the scope of that person’s charge and control of persons there engaged to work.  It now becomes necessary or appropriate to provide more detail in relation to those subjects, and the significance thereof. 

47                  The nature and scope of management responsibilities in relation to all open cut Coal mines in the State of New South Wales, as stipulated by the CMR Act or the OHS Act as I have foreshadowed, require that a particular management structure be in place, and further that the persons fulfilling the relevant roles comprise at least a Mine Manager, a Deputy Manager, and additionally open cut examiners appointed by the manager (ss 36, 37, 38 and 43 of the CMR Act and Part B of Schedule 1 thereto).  For ease of reference, I reproduce below the text of those statutory provisions, to the extent asserted by the applicants to be material to the issues arising.  Before doing so, I should record as already foreshadowed the following mutually agreed matters:

‘At all material times the Respondent [CAO] employed at HVO:

 

(a)        at least one Mine Manager who, subject to certain instructions, had full charge and control of all persons working at HVO (whether employees of the respondent or not) and all operations at HVO;

 

(b)       a number of Deputies to the Mine Manager; and

 

(c)       a number of Open Cut Examiners (OCEs).’

 

48                  The responsibilities of the mine officials have been prescribed by the CMR Act and the related regulations at all material times.  Schedule 1 to the CMR Act stipulated the order of seniority at open cut Coal mines as follows:

‘Part B Mining officials and order of seniority – open cut mines

Superintendent

Assistant Superintendent

Manager

Deputy Manager

Senior Examiner of an open cut mine

Examiner of an open cut mine.’

The CMR Act did not require the appointment of persons to each of the categories of ‘Mining officials’ above listed, and hence superintendents and assistant superintendents in particular were not required appointments thereby stipulated. 

49                  Moreover s 37 of the CMR Act included the following in relation to the functions of mine managers:

‘37.      Functions of managers

(1)       …

the manager of a mine:

            …

            (d)        shall have full charge and control of:

                        (i)         all persons employed at the mine, and

                        (ii)        all operations at the mine,

            (e)        shall enforce the observance, by all persons employed at the mine, of this Act, the regulations, the rules and any schemes and any directions, or conditions of exemptions or approvals, given thereunder, and

            (f)         shall have such other functions as may be conferred or imposed on the manager by this Act, the regulations, the rules and any schemes and any directions, or conditions of exemptions or approvals, given thereunder.

(2)       Without limiting the generality of subsection (1), the manager of a mine shall:

            …

            (b)        ensure that the machinery, apparatus and equipment in use at the mine is maintained in a safe working condition,

            …

            (e)        ensure that the officials appointed by the manager are trained in the exercise of any functions which they are required to exercise under this Act, the regulations, the rules and any schemes and any directions, or conditions of exemptions or approvals, given thereunder,  

            …

            (g)        take steps to ensure that any matter which is of an abnormal or unusual nature and which could affect the safety of persons in the mine is promptly brought to the manager’s attention,

            … .’

50                  An open cut examiner, abbreviated in these reasons as I have earlier indicated as ‘OCE’, exercised the role of directly supervising crews, his or her position being regulated by s 43 of the CMR Act as follows:

‘43.      Examiners of open cut mines

(1)       The manager of an open cut mine shall appoint such number of examiners of open cut mines as is sufficient in the manager’s opinion to carry out efficiently the functions at the mine conferred or imposed on examiners of open cut mines by this Act, the regulations, the rules and any schemes and any directions, or conditions of exemptions or approvals, given thereunder.

(2)       The manager of an open cut mine shall not appoint a person as an examiner of an open cut mine unless that person is the holder of a certificate of competency to be an examiner of an open cut mine and such other qualifications as may be prescribed.

(3)       No person, other than a manager of an open cut mine, shall appoint a person as an examiner of an open cut mine.

(4)       If an examiner of an open cut mine is present at the mine while the manager of the mine is absent and while there is no deputy manager, or senior examiner, of the mine present, the examiner:

            (a)       has full charge and control of all persons employed at the mine and of all operations at the mine, and

            (b)       must enforce the observance, by all persons employed at the mine, of this Act, the regulations, the rules and any schemes and any directions, or conditions of exemptions or approvals, given thereunder, and

            (c)        has such other functions as may be conferred or imposed by this Act on an examiner of an open cut mine.’

51                  The Coal Mines (Open Cut) Regulation 1999 (NSW)(‘Open Cut Regulations’), made under auspices of the CMR Act, conferred at the material times the following functions and imposed the following duties upon an OCE:

‘10.      Examiner’s functions and duties

(1)       An examiner at a mine, during the examiner’s shift and subject to any instructions given by more senior mining officials:

            (a)       has charge of all workers in the examiner’s inspection area, and

            (b)       must:

                       (i)         make such inspections as are required by the mine’s inspection system to be made by the examiner, and

                       (ii)        carry out such other duties with regard to general safety and working conditions as are required by the Act, this Regulation, the Coal Mines (General) Regulation 1999 or any rules, schemes or systems.

(2)       An examiner must, at the commencement of a shift, read and initial the report prepared by the previous examiner.

(3)       An examiner must not, while workers remain in the examiner’s inspection area, leave the area for any period that will affect the carrying out of inspections required by the mine’s inspection system (unless with the consent of a more senior mining official).

(4)       If consent is given by a more senior mining official for a period that will affect the carrying out of the inspections, the mining official must perform the duties of the examiner, or appoint another person holding similar qualifications to perform the duties, for so long as workers remain in the inspection area.

11.       Instructions to workers

            An examiner must:

            (a)       at the commencement of each shift ascertain the workers under the examiner’s charge, and

            (b)       where necessary, give to those workers such instructions (orally or in writing) as are necessary for them to comply with the requirements of the Act, this Regulation, the Coal Mines (General) Regulation 1999 and any rules, schemes or systems, and

            (c)        to the best of the examiner’s ability, ensure that:

                       (i)         workers under the examiner’s charge understand their duties, and

                       (ii)        all requirements of the Act, this Regulation, the Coal Mines (General) Regulation 1999 and any rules, schemes or systems are observed by those workers.’

The CMR Act and the Open Cut Regulations elsewhere set out requirements for the development of rules and schemes including safe work practices (Part 2 of those Regulations), transport rules (s 101), schemes for testing of equipment (s 103) and training rules (s 114). 

52                  I observe in passing that none of the provisions of the CMR or OHS Acts, nor of the Open Cut Regulations, which I have extracted above to the extent cited to the Court by the applicants, involve stipulations or provisions at least explicitly as to what may be described as industrial employment matters, such as wages and other emoluments, and absence on leave by reason of sickness etc.  Rather such stipulations and provisions are directed to employment duties and supervision related directly or indirectly to safety matters. 

The structure in place for management at the HVO – further matters related to control of personnel engaged in mining work in the HVO

53                  CAO adduced testimonial evidence concerning that management structure, being evidence geared largely to the matters I have already recorded, and in particular matters concerning safety of work practices, transport rules, schemes for the testing of equipment and training rules.  That evidence was provided by the following personnel employed by CAO at the material times:

(i)                  Mr Hendriks, presently Superintendent of West Pit and Coal, who had been Superintendent of the North Pit (also known as the Carrington Pit) of the HVO from about January 2001 to December 2004, and prior thereto the Superintendent-Planning of the North Pit from about September 2000 to January 2001 (Mr Cumberland had worked at the North Pit during the time of Mr Hendriks’ engagement at the North Pit) as Superintendent;

(ii)                Mr Israel, who has been a Supervisor and OCE (of course the abbreviation for open cut examiner) at the HVO since 1997, a Supervisor earlier from 1995 to 1997, and prior to 1995 a Mining Operator working on a crew; and

(iii)               Mr Sargent, presently a Mining Superintendent and who had been a Mining Systems Engineer at the HVO from about July 2000 to February 2006.

Each was cross-examined on behalf of the applicants.  I have of course made reference earlier to Mr Israel’s functions. 

54                  Mr Hendriks described the HVO management structure of CAO as follows:

(i)                  at the pinnacle relevantly of management was Mr Ernst, being the Mine Manager, who was not however a statutory Mine Manager for the purposes of the CMR Act, the statutory Mine Manager being Mr Van Dyk and all persons employed at the HVO mine directly reported to Mr Van Dyk on safety matters;

(ii)                the next level of the HVO management carried the title of Superintendent; some but not all superintendents held statutory appointments as Deputy Managers under the CMR Act; they comprised about 10 persons; those Superintendents who did not have a statutory appointment reported to Mr Ernst, and those with such an appointment reported to Mr Van Dyk on statutory matters and to Mr Ernst on other matters; and

(iii)               the supervisors comprised the next level of management, some being appointed under the CMR Act as OCEs.  

55                  Counsel for the applicants submitted that it was ‘clear from the legislation’ that CAO appointed officials had full charge and control of all workers at the mine ‘in terms of safety’, they being required to enforce observance of the CMR Act and the regulations, rules and schemes (so-called) thereunder.  The OCEs had charge of all workers in the examiner’s inspection area and were required to ensure that those workers understood their duties, and all requirements of the WR Act and the regulations, rules and schemes provided thereunder.  Mr Sargent testified that in relation to safety matters, CAO disseminated documents on a regular basis and promoted safety on a daily basis with the so-called ‘contract personnel’.

56                  On the subject of general control exercised or exercisable by CAO in relation to Messrs Wilton and Cumberland, counsel for the applicants submitted that the same involved or included, first, a requirement that the applicants ‘sign on and off’ the HVO site at the start and finish of each shift, secondly, the allocation of work to the applicants on a daily basis and thirdly, supervision of the applicants’ work on a daily basis.  In support of that thesis, the applicants pointed to a number of matters.  One was that in 2002, CAO implemented a method of ‘signing on and off’ using a swipe card; CAO’s so-called ‘acknowledged employees’ were not required to use a swipe card but they did ‘sign on and off’.  Each day CAO’s supervisors filled out attendance sheets for what was described as both acknowledged employees and contractor personnel.

57                  Mr Israel, who I have already identified as one of CAO’s supervisors, summarised the day-to-day supervision of the crews.  He would allocate work at the beginning of each shift and discuss that allocation with all members of his crew at the pre-shift toolbox talk, which would address the overall work expected of the crew for the ensuing day and safety matters and incident reports; that work so allocated by Mr Israel was recorded in his daily reports.  He also described the supervision undertaken during a shift as involving monitoring of the work of the crew, inspecting the areas in which the crew was working, keeping in touch by two-way radio and visiting crew members on the ground to discuss their work.  Also Mr Wilton testified as to each crew being addressed at the start of each shift by a CAO supervisor, who would discuss the work allocated and other matters that had arisen in the pit, inclusive of safety matters, incidents and the so-called shift plan; he testified that during a shift, the supervisors would communicate with him by two-way radio to assign work to him to undertake. 

58                  Both applicants and Mr Thompson testified that at the beginning of each shift, they would gather in the crew room to ascertain the names of the crew listed on a large whiteboard, and that alongside each name ‘a piece of equipment’ would be identified.  Both Mr Israel and Mr Hendriks testified as to a practice of giving preference to those workers described as ‘acknowledged employees’ for the driving of certain pieces of mining equipment, leaving the contractor personnel generally speaking to drive the trucks.  The timesheets for each of the applicants, which were attached to the Agreed Statement of Facts before the Court, showed the equipment in relation to which each applicant was designated to work, and in so doing demonstrated that each of the applicants worked on a range of equipment, and that each was not merely allocated to trucks.  Mr Israel acknowledged that he did allocate to Mr Wilton the operation of equipment other than trucks, such as dozers, graders and loaders.  The timesheets showed that in those weeks, Mr Wilton was supervised by Mr Israel, and during which he was rarely allocated to work on trucks.  Mr Touzell acknowledged moreover that MES was not informed by CAO as to what work would be allocated to the applicants.

59                  It was formally agreed between the parties that the applicants were subject to day-to-day supervision by CAO.  Once work was allocated, the supervisors were responsible for supervising the work performed by the crews.  As foreshadowed, Mr Israel described his duties as including the management of the ‘time-keeping of people’ and the ‘resource usage on the crew itself, the assignment of tasks’ and people thereto, and the monitoring of work to make sure that it was done effectively’ and ‘in line with the plan’.  Moreover in relation to the equipment supplied to the applicants, CAO gave the applicants specific documents as to how to carry out the operation of that equipment, and further that it was constantly updating those documents.  If anything, so it was contended on behalf of the applicants, there was more communication and supervision of the applicants by CAO’s supervisors than took place in relation to CAO’s acknowledged employees. 

60                  CAO responded to the applicants’ emphasis on their ‘general control’ to the effect that the same was ‘no more than one would expect in the operation of a mine where outside contractors work as part of a crew’, and further that ‘… the assignment of specific tasks by [CAO]… and the reassignment by [CAO] of a worker to a different task if [CAO] was not satisfied with the performance being achieved, does not suggest that the person performing the task is the employee of CAO’.  CAO emphasised that ‘… the assignment of work and the supervision of the performance of such work is a far cry from [CAO] having the legal authority to tell the applicants how to actually do a job’, and moreover that ‘all CAO is undertaking is assigning the job to be done and where’.  From what I have already recorded of the evidence, I think that such emphasis was somewhat of an overstatement, for what that might ultimately matter. 

61                  In any event, it was submitted by CAO that ‘… it is well established that a worker may be subject to quite detailed control over what they do and how they do it, yet still not be an employee’.  I was referred to Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 526, where MacKenna J observed, in relation to the services undertaken by certain owner-drivers engaged in the cartage of concrete by their own vehicles that ‘[a] man does not cease to run a business on his own account because he agrees to run it efficiently or to accept another’s superintendence’.  I observe that the issue there arising was whether a company marketing and selling concrete was an independent contractor and not subject to a ‘contract of service’ under section 3(a) of the National Insurance Act 1965 of the United Kingdom.  That issue was not therefore in line at least precisely with the issue here arising as to whether the applicants were employees of CAO rather than MES. 

Responsibility of CAO for management and discipline of the applicants – evidence adduced and submissions made by the applicants and CAO respectively

62                  The applicants submitted that the evidence established that ‘in practice’ CAO had responsibility for discipline, whereas MES had only so-called ‘token responsibility’.  In that regard, Mr Cumberland testified that day-to-day issues that arose concerning work performance were dealt with by CAO’s supervisors.  The following evidence was given by Mr Cumberland in the context of his evidence (under cross-examination):

‘Q.       And in paragraph 10 on page 1676 you say:

 

            Coal and Allied is responsible for my discipline.

 

            You say some other things, but just stopping there.  And when you say that, you are referring, are you, to the fact that Coal and Allied had the power to prevent you coming back onto the mine site if they weren’t happy with you?---Correct.

 

            Yes.  And when you talk there about performance management, do you see that---?---Yes.

 

            ---what are you referring to?---For example, if I am running a dais or my performance is not up to scratch on that mine lease, I need reviewing.  They might say you are not on the dais for a while until such time as you pick up your game.  We are going to put you back to a truck or another piece of equipment on the job.

 

            So, that the Coal and Allied supervisor observing what you are doing, if he is not happy with the rate at which you are performing, he could say to you well, look, we are not happy.  We expect more of you than that.  We are going to re-allocate you to a different task?---Correct.

 

            Okay.  And, of course, you may even be offered assistance, mightn’t you?  Someone might come along and say well, look, can we give you some assistance?  I mean, is there something that you are concerned about?---Correct.’

I do not think that the foregoing testimony can be appropriately described as demonstrative of mere ‘token responsibility’ having been assumed by MES for Mr Cumberland’s performance at the HVO.  In a labour hire context, the provider of the hired worker would seemingly have some responsibility in principle to its customer to whom a worker is hired as to for instance the hired person’s working qualifications and skills necessary for the performance of his or her work mutually envisaged to be undertaken. 

63                  It was next submitted by the applicants that in conformity with their day-to-day supervision, CAO managed the performance of their work and disciplined them on a daily basis when their work was inadequate, and further that so much was conceded in the course of the presentation of CAO’s evidence.  Mr Israel testified as to how he would explain to the operators (such as the applicants) the task required to be performed, and if not being so performed, how he would ‘like it done’.  He further testified as to his function of ensuring that all crew members returned from ‘crib break’ on time.  The applicants submit ‘as a typical example of day-to-day “discipline” imposed by Mr Israel upon a crew member for being late back to work after a crib break’, Mr Wilton’s testimony as follows:

‘Mr Israel wanted to know why we took so long for crib.  The next day he asked to see me in a small room, asked me why it had happened, why we took so long.  I explained myself to Mr Israel, the circumstances that it took so long.  He didn’t seem happy with the reason---

 

Well can you just give evidence as to what was said rather than---?--- He pulled me into the room and asked me why it happened and why I took so long and I told him the reasons why.

 

And did he say anything else?--- He did, yes.

 

And what did he say?--- Why it happened, why did I take so long.  Don’t let it happen again.  Yes and just be aware of your times next time.’

64                  In relation to incidents that justified more so-called formal discipline, the applicants submit that ‘… in practice [CAO] had responsibility for disciplining [both Messrs Wilton and Cumberland]’.  Two incidents were exemplified.  The first related to the collision of two vehicles, one being a dozer driven by Mr Cumberland, and the second not being actually driven at the time of the accident in which it was damaged.  The report to management recorded the first incident as follows:

‘502 Dozer doing pad repairs at loop.  Reversed back to pick up lighting plant for relocation to new area.  Grader was parked slightly to right, behind path of dozer as it was reversing back.  Ripper on dozer contacted ram on grader rippers (814 grader), breaking ram.’

The report was completed by the OCE for the relevant shift (Mr Sheldon), who recorded the following:

‘1 on 1 discussion with grader operator re parking in well lit or designated areas.  General reminder in crew briefing.

 

1 on 1 discussion with dozer operator ensuring working area is clear before proceeding.’

It was submitted on behalf of the applicants that so much constituted ‘a clear indication that [CAO] was alone responsible for this disciplinary action’, and further that those actions were taken ‘without reference to MES’.  However the connotation of ‘disciplinary action’ tends not to appositely portray the significance of the CAO management conduct revealed by that report.  What took place at the instance of the CAO management remains to be viewed in the entire context of the labour hire relationship to which each of the applicants was subjected. 

65                  The next or second incident of alleged disciplinary action on the part of CAO, as exemplified by the applicants concerning Mr Cumberland, occurred on 8 February 2002, in relation to which it was conceded by the Applicants to involve ‘some contest in the evidence’.  This incident was described in the CAO investigation report attached to Mr Hendriks’ affidavit as follows:

‘Summary:

Damage to dozer 510 when overburden dropped on it.

Detail:

Dozer 510 cleaning up around shovel 321. Failed to communicate with shovel operator.  Shovel swung around with a bucket of overburden and saw the dozer within the area of the swing.  Shovel operator tried to swing back but the bucket tripped dropping overburden onto the dozer.’

The corrective action listed in the same CAO record was described as ‘Review incident: Discussion & disciplinary action’. 

66                  That disciplinary action was said to have been allocated to Mr Hendriks to put in place; he outlined the same as involving his ‘talking with MES about what they had done in relation to the incident’.  I was referred to Mr Hendriks’ affidavit evidence, which recounted that he had a number of discussions with Mr Touzell and Mr Cumberland, and also a meeting with Mr Touzell and Mr Hann (both of MES), but that he could not recall the precise discussions that occurred on the subject, only that they discussed that the incident was a major and serious incident due to the potential safety hazards involved.  Mr Cumberland’s account of the incident was as follows:

‘The second incident related to a shovel dropping 50 tonne of material on my dozer.  The incident resulted from a misunderstanding between the shovel operator and myself.  An on site inquiry was conducted and I was called to a meeting with C&A management.  I was subsequently stood down.  During that period, I was provided with counselling by C&A.  However, I was not paid.  At the end of the period, I rang the MES office in Muswellbrook and asked an employee of MES whose name I cannot recall what was happening.  I was told that MES would get back to me after they had spoken with C&A.  Again I was subsequently telephoned by a representative of MES who told me that C&A would take me back subject to a further meeting.  Present at that meeting were Messrs Ernst, Hendriks, Touzell, Morgan and myself.  I was informed by Messrs Ernst and Hendriks that they were not happy with what had occurred and that I would have to be of good behaviour for the next 12 months.  I recall that Mr Ernst said words to the following effect:

 

            “Any further incidents will jeopardise your job with C&A”.’

 

The reference to Mr Cumberland not being paid is not without significance however to CAO’s case, in that it tends to put into context Mr Ernst’s use of the words ‘your job with C&A’.  Mr Ernst was of course an officer of CAO. 

67                  Mr Cumberland testified further as to having been told by Mr Hendriks that he would not be allowed to return to work at the HVO until the investigation of the incident was completed, and further that Mr Touzell (of course from MES) had told him ‘[t]he Mine Superintendent suspended you’.  Mr Ernst did not testify in the proceedings, and Mr Sargent said that he had no recollection of the detail of the incident.  Assisted by his notes from his diary, Mr Touzell gave his account of events in his affidavit of 7 June 2006 concerning the incident, as follows:

(i)                  he was contacted on 8 February 2002 by Mr Sargent;

(ii)                following the incident CAO commenced an investigation;

(iii)               Mr Touzell asked Mr Cumberland to attend the offices of MES on 11 February 2002 and at that meeting Mr Cumberland said to Mr Touzell words to the effect ‘Jereon Hendriks has asked me for a letter to say that I recognise that a serious safety issue has happened.  Can you help me write a letter to him’;

(iv)              Mr Touzell drafted a letter to Mr Hendriks on Mr Cumberland’s behalf, which was described by counsel for the applicants as a plea from Mr Cumberland to Mr Hendriks for continued employment at the HVO;

(v)                Mr Touzell also drafted a letter to Mr Hendriks, for signature by Mr Hann, the managing director of MES, by way of explanation of the discussions and action that MES had taken in relation to the incident, which letter was sent on or around 13 February 2003;

(vi)              Mr Touzell attended a meeting with Mr Hendriks and Mr Sargent on or about 13 February 2002 but he did not recall the exact details of the meeting; however he did recall that CAO representatives were concerned about the seriousness of the incident, Mr Touzell testifying that ‘I understood that… they were considering whether Mr Cumberland should be allowed to continue to perform work at HVO in the future’;

(vii)             MES issued a written warning to Mr Cumberland on 13 February 2002 and sent a copy of that warning to CAO;

(viii)           on or about 14 February 2002, Mr Touzell met with Messrs Mr Cumberland, Hendriks and Sargent to discuss the incident further, and also with Mr Ernst, CAO’s Mine Manager, for the same purpose;

(ix)              the outcome of those meetings was that Mr Cumberland would be permitted to return to the HVO, but not until after he had conducted a so-called ‘communications audit’ on 15 February 2002;

(x)                Mr Touzell described that ‘communication audit’ as follows:

‘The communication audit involved Mr Cumberland attending site to listen to radio communications between mining operators to assess whether they were being conducted properly and that he was aware of the proper communications procedures.’

The reference above (at [iii]) to a ‘serious safety issue’ having arisen may be observed. 

68                  In contrast, in his affidavit evidence Mr Touzell testified that at the foregoing 14 February 2002 meeting, Mr Ernst said to Mr Cumberland ‘you will need to be on your best behaviour.  Otherwise you won’t be allowed to work on the site’.  In the course of his cross-examination, Mr Touzell described Mr Ernst’s words used as ‘[a]ny further bad behaviour will affect the continuation of your working at Hunter Valley.  I will ask your employer to remove you from the site’.  It was submitted by the applicants that since Mr Ernst was not called to deny Mr Cumberland’s version of that conversation, nor Mr Touzell’s contrary versions of the conversation, Mr Cumberland’s version should be accepted.  It was further said on behalf of the applicants that ‘[i]t is clear from the evidence that CAO was directly responsible for the discipline of Mr Cumberland over this incident’, and that ‘[t]he actions taken by MES were essentially taken at the behest of [CAO] and the final decision to allow [Mr Cumberland] to return to work and to continue working was made by [CAO]’. 

69                  The next or third incident concerning alleged disciplinary action on the part of CAO involving Mr Cumberland was said on behalf of the applicants to have occurred on 10 March 2002.  That incident was described in the so-called investigation detail report attached to Mr Hendriks’ affidavit, as follows:

‘Water Cart reversing into fill point collided with stand pipe.  ... Employee was directed to Dam 9 water fill point.  This filling station has restricted access due to barricading and is a reverse access not drive through.  It also has a bend in the access.  Reversing the operator realised he was too far to the right and could not see the stand pipe.  He then braked and pulled forward but it was too late, the water cart came in contact with the stand pipe support column, bending it and moving the stand pipe in its coupling.’

Two so-called ‘corrective actions’ were entered on the third page of that report; the first was said to have been completed on 10 March 2002, being the date of the accident, and to have involved ‘one on one discussion with operator on caution with operating’, in which discussion Mr Sheldon participated as the supervisor.  The second course of action was described by Mr Hendriks in the report as ‘Discuss incident with Manager on appropriate action for operator’. 

70                  Mr Hendriks (of course a Superintendent officer of CAO) stated in his affidavit on the subject as follows:

‘I caused this notation to be included in the report.  I believed that it was appropriate to discuss with the Mine Manager, Mr Ernst, the fact that Mr Cumberland had been involved in three incidents within the space of approximately one month and that this reflected a trend involving that particular contractor person.’

 

Mr Hendriks was submitted by the applicants to have indicated, in the course of his cross-examination, an absence of recollection of the meetings associated with this incident and of any action taken by CAO concerning the same, but for what it may ultimately matter, it was not put to him in cross-examination that such so-called notation in Mr Hendriks’ reportwas incorrect, much less not authentic. 

71                  According to Mr Touzell, there was a meeting at the HVO on 11 March 2002 between Mr Touzell, Mr Sargent and Mr Hendriks, and he recorded in his affidavit in that regard the following:

‘During the meeting, Mr Hendriks informed that C&A would not permit Mr Cumberland to perform work at HVO unless and until he resolved his personal issues which appeared to be affecting the safe performance of his work at HVO.  The outcome of this meeting was that Mr Cumberland could not attend work for a short period to allow him to obtain counselling to deal with those personal issues.’

Mr Touzell said that he discussed the result of the meeting with Mr Cumberland and that MES would not allocate to Mr Cumberland work for at least two weeks in order to allow him to undergo counselling.  The implications inter alia as to safety concerns may be observed. 

72                  Mr Touzell (of course on behalf of MES) emailed CAO on 13 March 2002 a report concerning the issue, which included ‘Steve must also satisfy both MES and [CAO] that his problem is overcome sufficiently to ensure his return to work does not place him or others at risk’, thereby implicitly highlighting the theme of safety to persons working in proximity to Mr Cumberland.  Mr Touzell met with Messrs Sargent, Hendriks and Cumberland on 23 March 2002 on the subject of Mr Cumberland’s return to work.  Mr Touzell deposed to an absence of recall of the precise details of the meeting, but did recount the following in his affidavit evidence:

‘(a)      Mr Hendriks and Mr Sargent informed me that, since Mr Cumberland had not yet undertaken counselling, he would not be permitted to perform work at HVO;

 

(b)       Mr Hendriks suggested that the C&A counselling service might be available to assist Mr Cumberland in securing access to a counsellor to accelerate the process; and

 

(c)        Mr Sargent agreed to enquire about whether Mr Cumberland could see a counsellor engaged by C&A in order to facilitate Mr Cumberland’s quick return to performing work at HVO.’

 

In the result, it was emphasised on behalf of the applicants in relation to the foregoing incident that CAO determined that Mr Cumberland decided he ‘would not attend work’.  It was further submitted that CAO required in any event that Mr Cumberland undertake counselling and determine when Mr Cumberland ‘could return to work’, and that ‘it is clear from the evidence that [CAO] was directly responsible for the discipline of [Mr Cumberland] over this incident the actions taken by MES were essentially taken at the behest of [CAO] and the final decision to allow [Mr Cumberland] to return to work and to continue working was made by [CAO]’. 

73                  Generally in relation to the subject of responsibility for supervision, and the carrying into effect by CAO of the supervision of persons engaged in work at the HVO, CAO pointed to the following contextual matters required of the Court to be borne in mind:

(i)                  the arrangement between each of the applicants and MES that they would submit to ‘directions’ from MES client mining operators such as CAO;

(ii)                CAO supervised the applicants necessarily in terms of ensuring that the applicants performed work in accordance with the contractual arrangements in force between CAO and MES the subject of the Supply Agreement;

(iii)               CAO and statutory officials such as OCEs supervised the applicants in terms compliant with obligations arising under safety legislation, inclusive of those obligations conferred by the CMR Act and the CMR Regulations, and also of the OHS Act, being obligations not confined to CAO’s employees but extending to all persons engaged at the HVO, including those workers supplied by MES.

74                  In the foregoing context it was emphasised therefore by CAO that the overarching safety regime imposed by the safety legislation did not assist the applicants contentions that they were employees of CAO, and further that the statutory obligations of CAO applied irrespective of whether the applicants were employees of MES, and moreover MES also had obligations under the OHS Act to its employees. 

75                  In any event, CAO challenged conceptually the notion of ‘discipline’ inherent in the applicants’ submissions as to CAO’s treatment of the applicants on the occasions when their work was considered by CAO to have been inadequate, and contended that the applicants’ submission tended to merge that notion with the implications of so-called ‘performance management’.  I was referred to the definition of ‘disciplinary action’in Butterworth’s Australian Legal Dictionary (1997) at 364, where the following appears in an employment context implicitly supportive of that CAO contention:

‘Generally, disciplinary action includes a decision by an employer to defer paying an increment to the employee, or to reduce the rank, classification, position, grade or pay of the employee; to impose a fine or forfeit pay; to annul the appointment of an employee on probation; or to suspend or dismiss the employee… .’

No such action appears to have been taken by CAO in relation to either applicant, other than the suspension of Mr Cumberland, though the issue arising in that context was the reasonableness of CAO so doing. 

76                  Moreover in acknowledging that CAO could order the removal from the site of the HVO of any person, and prevent entry to the site by any person (other than a person entering or being on the site with statutory authority), CAO asserted that any such action was not what would ordinarily be described as ‘disciplining’ a worker engaged in work activity on the site.  It was further pointed out that CAO had the right under its contractual relationship with MES to refuse to accept a MES worker on the mine site and to request from MES another worker to work at the mine site (see cl 2.11 of the Supply Agreement).  That right was described as an ordinary incident of the contractual relationship under which CAO, as a client of MES, requested the kind or specification of worker which CAO required to perform its mining activities.  If CAO was to exercise that right, MES was said by CAO to be contractually entitled to place the worker not suitable to CAO for time being at any other site, or in any other position, for the time being available to MES for that purpose.

77                  The applicants contended nevertheless that CAO had responsibility for discipline, and that MES had only token responsibility for discipline.  That contention was said by CAO however to be not borne out by the evidence, and rather to be seemingly based upon an unrealistic or artificial view of what constitutes discipline.  Specifically CAO pointed to the following matters:

(i)                  the applicants did not identify the legal basis for any right of CAO to discipline the applicants, and in that regard it was again emphasised that the applicants were provided by MES, and were remunerated by MES; CAO asserted difficulty of understanding how any such discipline on CAO’s part could occur;

(ii)                CAO had no obligation to remunerate the applicants for anything;

(iii)               CAO had no right or ability to impose any fine or other detriment upon the employment rights of either of the applicants;

(iv)              CAO did not purport to provide the applicants with any career paths or opportunities for progression in employment status;

(v)                although CAO was entitled to caution the applicants in relation to any failure to comply with site rules or slow performance of duties, and could bar the applicants from entry to the HVO site, such entitlement was no different from how CAO could treat the local fuel oil supplier or tyre supplier or machinery repairer;

(vi)              the action of CAO in response to the first incident involving Mr Cumberland, when he was told of the need to ensure that a work area was ‘clear’ prior to proceeding to drive a dozer into that area, did not constitute disciplinary action;

(vii)             the conduct of CAO in response to the second incident involving Mr Cumberland, by way of requiring him to participate in a communications audit, did not constitute disciplinary action;

(viii)           the action of CAO in response to the first incident involving Mr Cumberland, being the conduct of a discussion as to the need for him to exercise caution whilst operating a cart, also did not constitute disciplinary action;

(ix)              the action of CAO in response to the early termination of a shift by Mr Cumberland, namely to discuss the need to better manage his time, also did not constitute disciplinary action; and

(x)                the action of CAO in response to Mr Wilton taking an extended crib break, by telling him that it should not happen again, and to be aware of the length of crib breaks in the future, did not constitute disciplinary action.

There is significant force in those CAO contentions. 

78                  As to what CAO described as the suggestion of the applicants that MES was other than responsible for disciplinary action taken against Mr Cumberland, CAO submitted that such suggestion ‘strains the effect of the evidence’.  CAO pointed out that MES was ‘heavily involved’ in the investigation following upon the second incident, being a matter said to have been recognised by the applicants in their submissions on the subject.  In that regard, whilst CAO was considering whether Mr Cumberland should no longer be permitted to work at the HVO, no decision in that respect was made since MES decided to suspend Mr Cumberland.  CAO asserted in effect that even if it had made and implemented such a decision, it was wrong to describe what subsequently occurred as ‘disciplinary action’, since CAO remained entitled, pursuant to its contractual arrangements with MES, to determine whom it would accept from MES by way of employment assistance and from whom it would not do so.

79                  CAO contended moreover that the difficulty for the applicants in placing reliance on the alleged statement of Mr Ernst that ‘any further incidents will jeopardise your job with C and A’, was that the content of his statement was denied by the other participants in the meeting.  In any event it was said by CAO that the words they attributed to Mr Ernst were of no significance to the issue arising in the proceedings, because they constituted merely an isolated statement by Mr Ernst falling for consideration amongst the numerous factors to be assessed in characterising the nature of the relationship between CAO and the applicants.  CAO submitted moreover that any alleged statement by Mr Ernst was outweighed by the other factors asserted by CAO to support its case that the relationship between CAO and each of the applicants was not one of employment.

80                  In relation to the applicants’ assertion that the actions taken by MES in relation to Mr Cumberland were ‘essentially taken at the behest of [CAO]’, the response of CAO was that it was ‘plain’ that it made no suggestions to MES concerning the action, if at all, to be taken by MES against him.  Moreover it was submitted by CAO that if by that assertion of the applicants, the same was intended to be of no more significance than that if the client of a labour supply company is unhappy with the supplied labour, then the labour supply company had better do something about it, or else lose the contract of labour supply.  That did not mean in CAO’s view that because the disciplinary actions of MES, such as were implemented, were reactive, they were merely token, and not indicators of where primary responsibility for the applicants contractually laid. 

81                  Generally as to the significance of the extent of direction and control of the applicants exercised by CAO, the applicants submitted that the Court was requested to look at all of the circumstances of the employment relationship, and in particular whether the label given to it reflects the reality, as well as the significance, of ‘the control test’ in any analysis of the employment relationship.  CAO pointed however to the need to bear in mind that the contexts of the judicial observations for instance in The Queen v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138 at 151 (Dixon, Fullagar and Kitto JJ) and Dalgety Farmers were not related to labour hire arrangements, contrary of course to the situation here.  That different context was said to reduce the reliance that may be placed on those judicial observations.  That passage relied upon by the applicants in The Queen v Foster joint judgment at 151 was as follows:

‘For, if in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, a clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual.’

It was hence said by CAO that the circumstances in which persons are engaged to undertake work have developed materially since those general observations were made, particularly in relation to the evolution of activity of labour hire agencies.  Thus in terms of control, it was further said by CAO that the relevant inquiry is not confined to the party that has exercised control, but extends to the circumstances by which control came to be exercised, including any contractual allocation of control by an employer to that other party, and any contractual undertaking by an employee to accept control from such other party.

Contractual arrangements made between the applicants and CAO – ultimate submissions of the applicants by way of what appeared in the so-called ‘Conclusions’ to their submissions on that issue

82                  Further submissions in writing of the applicants in chief designated as the ‘Contract between Applicants and Respondent’, and comprising 13 pages, were placed before the Court purportedly as ‘Conclusions’.  Those submissions commenced with an acknowledgment of the applicants that ‘in so far as matters relating to the employment arrangements of the Applicants were in writing, they mainly suggest employment by MES rather than [CAO]’, given particularly that ‘the Applicants were paid by MES and MES also made provision for superannuation, workers compensation and deducted and remitted income tax payments to the Australian Taxation Office’.  Those circumstances as to payment of wages by MES, and of matters incidental thereto, such as the issue of group certificates and provision for superannuation, were said by the applicants not to constitute conclusive evidence of the existence of any employment relationship between the applicants and MES.  I was referred by the applicants to the need to consider ‘the reality’ of the ‘paper arrangements’, notwithstanding that the same may not be characterised as ‘sham’ in nature, and to the following observations in that regard of Handley JA in Pitcher and Another v Langford and Another (1991) 23 NSWLR 142 at 162:

‘Almost all the matters relied upon… for the appellants, namely declaration of the shearers’ wages by the owner, payment of insurance premiums thereon, payment of wages by the owner to the shearers, payment of the tax thereon and the signing of the written agreements are paper matters. Such paper matters can be no more effective than signed agreements in preventing a Court from discerning the real nature of the relationship between the parties.’

The foregoing principle may be readily acknowledged forensically.  Whether it may operate adversely to the operation of the reality of the subject documentary arrangements as put in place by MES and CAO is however another matter. 

The applicants’ invocation of United Kingdom authority as an illustration of the juridical significance of its case in a labour-hire context

83                  The applicants drew attention to what was said to be ‘the correct legal position’ located within paras 52, 53 and 64 of the reasons for judgment of Mummery LJ in Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 (with which Sedley LJ was essentially in agreement).  Brook Street was a United Kingdom Court of Appeal decision, the context whereof related to labour hire arrangements between Brook Street Bureau UK Ltd, a well known employment agency, and a local council’s mental health hostel for the periodic cleaning thereof, which in the events that happened were physically undertaken at material times by the applicant Mrs Dacas.  The Court of Appeal comprised Mummery and Sedley LJJ, whose reasons for decision were essentially in line, and Munby J who differed materially in what may be described as doctrinal reasoning to that of the other two members of the Court while reaching nevertheless the same ultimate decision.  The difficulty to an understanding of the substrata to the appeal in its various aspects, as well as in its outcome, lies largely in relation to the procedural context to the appeal.  For present purposes I will confine my consideration of the differences in principle concerning the implications of labour hire, though obiter,apparent in the reasons for decision of each of Mummery and Sedley LJJ compared to those of Munby J, and to the extent to which the statements of principle emerging from the respective reasons for judgment in Brook Street may have an operation in relation to the issues presently arising. 

84                  I would commence my consideration of the respective parties’ approaches to the implications of Brook Street by recording that in the leading judgment, Mummery LJ observed that had the Court of Appeal been seized of all of the circumstances of the case, it may well have been open for the Court of Appeal to have found that Mrs Dacas was an employee of the local council to whom the services of Mrs Dacas had been provided by Brook Street Bureau by way of labour hire, and against which local Council their Lordships considered that her case for unfair dismissal should have been prosecuted rather than the labour hire agency Brook Street Bureau.  As I foreshadowed, Sedley LJ took a similar approach in reasoning as well as in outcome to that taken by Mummery LJ.  However Munby J adopted what I think may be described as the more conventional analytical approach. 

85                  It was in that context broadly stated that Mummery LJ made the following observations concerning the local borough Council’s status as an employer or principal in relation to Mrs Dacas, which the applicants contended to be reflective of the correct approach here required to be adopted in principle:

‘17.      The critical point is that, although the construction of the contractual documents is important, it is not necessarily determinative of the contract of service questions, as contractual documents do not always cover all the contractual territory or exhaust all the contractual possibilities.  In determining the true nature of the relationship (if any) between each of the respective parties, it is necessary to consider the total situation occupied by the parties … Although there was no express contract between the applicant and the end-user in this case, that absence does not preclude the implication of a contract between them.  That depends on the evidence, which includes, but may not be confined to, the contractual documents.’

…

52.       … The formal written contracts... may not tell the whole of the story about the legal relationships affecting the work situation.  They do not, as a matter of law, necessarily preclude the implication of a contract of service… There may be evidence of a pattern of regular mutual contact of a transactional character… from which a contract of service may be implied by the tribunal… .

…

53.       I approach the question posed by this kind of case on the basis that the outcome, which would accord with practical reality and common sense, would be that, if it is legally and factually permissible to do so, the applicant has a contract, which is not a contract of service, with the employment agency, and that the applicant works under an implied contract, which is a contract of service, with the end-user and is therefore an employee of the end-user with a right not to be unfairly dismissed.  The objective fact and degree of control over the work done by Mrs Dacas at West Drive over the years is crucial.  The Council in fact exercised the relevant control over her work and over her… .  The fact that the obligations were contained in express contracts made between Mrs Dacas and Brook Street and between Brook Street and the council does not prevent them from…being read across the triangular arrangements into an implied contract and taking effect as implied mutual obligations as between Mrs Dacas and the council. 

…

86                  CAO submitted that the foregoing analysis of Mummery LJ (and similarly that of Sedley LJ) ‘falls rather short’, and that ‘[t]he first question to be asked and answered is whether there was a contract at all between the worker and (1) the ultimate client of the labour hire agency or (2) the labour hire agency’.  CAO seemingly acknowledged at the outset that in some circumstances there may be an overlap between the issue of intention to create legal relations and issues of agreement and consideration, reference being made in that regard to Carter J W and Harland D J, Contract Law of Australia (4^th ed, Butterworths 2002) p 163.  In any event it was further submitted by CAO that whilst Mummery LJ did not explicitly identify what CAO described as that fundamental issue in contract law, there was conceivably ‘just an echo of it’ in his Lordship’s reasons at [52] partly extracted above.  Nevertheless, so the CAO submissions continued, his Lordship did not indicate it was necessary first to consider whether or not the relevant parties intended to enter upon legal relations.  That absence of indication was said by CAO to also reside in the reasoning of Sedley LJ, where his Honour’s discussion at [75] of the legal status of a worker was described by counsel for CAO as ‘rather too compressed’, and which reasoning had failed ‘to address the fundamental questions of contractual analysis’. 

87                  CAO submitted further that it could not be correct, and would be contrary to Australian authority, for this Court to consider what is ‘the nature of any implied contract before first answering the question – did the parties intend to create legal relations’, and further that ‘[t]he mere attendance by one party at the workplace of another does not give rise to the implication of a contract between those parties… [Sedley J’s] reasoning impermissibly conflates the separate stages of contractual enquiry’.  CAO further submitted, by way of contrast, that Munby J appeared to approach the case ‘in a more conventional way’ than was taken by Mummery and Sedley LJJ, and to have included the issue of intention ‘in the mix of issues for considering what the facts actually proved including whether or not there was a contract with anyone at all’.  I have explored in more comprehensive detail CAO’s submissions in relation to Brook Street later in these reasons.

88                  The applicants next drew attention to the decision of the United Kingdom Court of Appeal in Cable & Wireless plc v Muscat [2006] IRLR 354 handed down subsequently to Brook Street, where it was found by majority that a labour hire worker was employed by the host rather than by the agency through which the host had directed that he be engaged.  Whilst the applicants acknowledged the facts in Cable and Wireless were distinguishable from Brook Street, the applicants placed reliance upon the acknowledgment by the Court of Appeal in Cable & Wireless upon the majority’sviews in Brook Street, which they submitted to be seemingly to the effectthat so long as remuneration is being provided in reality by the employer, it matters not that it is not paid directly by that employer but by a third party pursuant to another arrangement made by the employer with that third party.  Quoting from Cable & Wireless, the applicants asserted that a person who would otherwise be the worker’s employer did not cease to be his employer by arranging for the wages to be paid per medium of athird party, and further that ‘[t]he essentials of a contract of employment are the obligation to provide work for remuneration and the obligation to perform it, coupled with control’, whether the arrangements for payment are made directly or indirectly.  I will later return to a further discussion of Cable & Wireless in the context of CAO’s submissions. 

89                  The applicants contended therefore that ‘the real nature’ of ‘the total employment relationship’ of the applicants in this case demonstrated an employment relationship between the applicants and CAO, pointing thereby to the following matters which they suggest tilts the balance to a finding by the Court of a contract between the applicants and CAO:

(i)                  CAO determined that each of Messrs Wilton and Cumberland could commence work at the HVO, in the context of CAO’s awareness that Mr Wilton had previously worked on the HVO site, and of Mr Cumberland’s present availability and existing experience in Coal mining, and of his subsequent induction and testing/training over two days at the HVO site prior to starting work;

(ii)                CAO provided to each of the applicants rosters indicating when they were required to work and in which particular crews, and their respective working times for the following twelve months;

(iii)               CAO later directed in January 2002 that each of the applicants commence working a rostered twelve hour shift in lieu of an eight hour rostered shift;

(iv)              the applicants worked according to the CAO rosters and were required to inform CAO when they could not work at all;

(v)                the applicants drove plant and equipment owned and maintained by CAO;

(vi)              the applicants were integrated into CAO’s workforce and performed similar work to ‘the acknowledged employees’ of CAO;

(vii)             the applicants were required by CAO ‘to sign in and out of the mine’ on every shift they attended, and later to record their attendance with an electronic swipe card; additionally the applicants’ timesheets were signed by supervisory staff employed by CAO;

(viii)           the applicants’ work was supervised by acknowledged employees of CAO;

(ix)              the applicants were stood down by supervisory staff of CAO when there was no work for them to perform due to inclement weather or machinery breakdown;

(x)                the applicants worked at CAO’s premises exclusively during the period the subject of the present claim; and

(xi)              CAO had the right to have the applicants removed from the site and exercised discipline over the applicants.

90                  For largely the foregoing reasons in summary, the applicants submitted that it was CAO rather than MES which had the right to control and did in fact control the applicants, and in that regard, [CAO] assigned work to and supervised the work of the applicants on a daily basis.  It was emphasised that if there was ‘anything amiss with the performance of the Applicants it was CAO who detected this and took the practical steps to remedy it’, and further that ‘[t]he supervision by MES was only notional in matters such as discipline and safety because for all practical purposes decisions in those matters were taken by [CAO]’, and yet further that ‘MES [did not] have any power to direct the Applicants to work at a different site’.  In that context, the applicants also contended that ‘[w]hile the control test is no longer the sole test of unemployment, it is still highly significant and may even be determinative in a case like this’, pointing thereby to the following dictum, which I would observe nevertheless to be obiter,as well as inconclusive,of Clarke JA in Dalgety Farmers at 51:

‘But, where the only question is whether a worker is employed by A or B, there is much to be said for the view that the question should be answered solely by reference to the control test.  It is unnecessary to pursue the question further in the present case where the indicia, including the legal right of control, point so overwhelmingly in favour of… the employers.  However, where the factors are more balanced, the control test could well be seen to provide, in the limited situations I am discussing, the determinative test.’

91                  It was emphasised further by the applicants that they ‘were fully integrated into [CAO’s] operations’, in that ‘[a]ll of the workers on each crew, including the Applicants, were engaged to perform similar duties and subject to similar rules of employment… [and] were subject to essentially the same supervision… [and] received the same information as they worked in the same environment and the safety requirements were the same for each crew member’.  Moreover it was asserted by the applicants that the circumstances of the case ‘demonstrate that the arrangements for payment of wages and other “paper matters” were outsourced by [CAO] to MES’.  I would think that description to be contrary to the reality of the relationship between MES and each of the applicants, and indeed that the exercise of the somewhat basic function alone of paying the applicants’ wages tends against the viability of the applicants’ case, the payment of wages and the obligation so to do being normally of the essence of an employer’s obligation the subject of a contract of employment in relation to an employee.  Counsel for the applicants drew attention further to the circumstance that ‘[w]hile the Applicants were remunerated by MES on an hourly basis for the work they performed with premiums for penalty payments, [CAO] paid to MES an hourly rate for the work done by the Applicants for [CAO] with a similar scale of premiums when the penalty payments were paid by MES to the Applicants’.

92                  It was therefore submitted by the applicants that ‘the facts as to the total employment relationship demonstrate that there was an employment relationship between each of them and [CAO] from the commencement of their employment at the HVO’.  Alternatively it was submitted by the applicants that ‘an employment relationship came into existence before 1 July 2002’, that being ‘the commencement time of the claim’.  Additionally, as I have foreshadowed it was submitted by the applicants that in principle, ‘[c]onduct which might not have manifested a mutual intention to enter into a contract had it lasted only a brief time may become unequivocal if it is maintained over a lengthy period of time’, referring thereby to the reasons of Mummery LJ at [17] in Brook Street.  Of course as I have already mentioned, Sedley LJ adopted a similar approach, but Munby J chose to differ. 

93                  Counsel for the applicants next drew attention to the more recent case in England of Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd and others [2006] QB 510 as ‘[s]upport for a different approach depending on time and integration on the worksite, albeit in the context of vicarious liability’, in the light of what was there postulated by Lord Justice Rix at [80] on the theme of ‘practical and structural considerations’ in relation to the engagement by a ‘temporary employer’ of a person who might still be ‘recognisable as the employee of his general employer’.  His Lordship expressed the following views at [80]:

‘One is looking therefore for practical and structural considerations.  Is the employee, in context, still recognisable as the employee of his general employer and, in addition, to be treated as though he was the employee of the temporary employer as well?  Thus in the Mersey Docks situation, it is tempting to think that liability will not be shared: the employee is used, for a limited time, in his general employer’s own sphere of operations, operating his general employer’s crane, exercising his own discretion as a crane driver.  Even if the right of control were to some extent shared, as in practice it is almost bound to be, one would hesitate to say that it is a case for dual vicarious liability.  One could contrast the situation where the employee is contracted-out labour: he is selected and possibly trained by his general employer, hired out by that employer as an integral part of his business, but employed at the temporary employer’s site or his customer’s site, using the temporary employer’s equipment, and subject to the temporary employer’s directions.  In such a situation, responsibility is likely to be shared.  A third situation, where an employee is seconded for a substantial period of time to the temporary employer, to perform a role embedded in that employer’s organisation, is likely to result in the sole responsibility of that employer.’

Of course the present issue arising is not concerned with identifying where vicarious liability in tort might lie in relation to any imputed ‘shared’ circumstances of labour hire, as was the case in Viasystems.

94                  The further submission of the applicants was that ‘[t]o the extent that there is any uncertainty over whether the initial arrangements in June/July 2001 put in place a contract of employment between the applicants and [CAO], the evidence as to the full time continuing and exclusive relationship between [them] by 1 July 2002 removes that uncertainty’.  By that later time, so the applicants’ submission continued, ‘it is abundantly clear that the reality of the work circumstances’, which I have sought to fully outline in these reasons, ‘rendered the relationship between the Applicants and MES as being one essentially relating to “paper” matters, such as the administration of the payroll.’  It was said further by the applicants that it was during that later time that the applicants ‘had the real relationship’ with CAO, it being said to be significant that it was CAO rather than MES which brought about a fundamental change in the applicants’ contracts of employment in January 2002.  That later time was said to be when the applicants at the direction of CAO ‘commenced working a 12 hour shift roster rather than the 8 hour rosters they worked prior to this time’.  By ‘real relationship’ however, the applicants’ emphasis was upon circumstances continuing in substance and reality upon the basis of a hire of labour pursuant to a contractual arrangement between CAO and MES. 

95                  It was contended by the applicants nevertheless that indicia as to whether there is an employment relationship found in the reasons for joint judgment of Wilson and Dawson JJ in Stevens at 36-37 should here apply in principle.  The appeal raised the issue as to whether a principal is liable for the negligence of an independent contractor on the basis that the activities he was engaged to perform were extra-hazardous.  Unanimously the High Court held that the relationship was one of independent contractors.  The principal judgment was written by Mason J (as he then was), with whom Brennan J expressed general agreement, and the fifth member of the Court (Deane J) agreed with the reasons for conclusion of Mason J.  That authority related thus to vicarious liability in tort, and as I have foreshadowed, may be said therefore to be not operative at least directly on point in relation to the present cause of action.

96                  Given the measure of assistance to be gained from that dicta of Wilson and Dawson JJ in Stevens for which the applicants contended, it becomes appropriate in any event for completeness to list what the applicants further contended to reflect an ‘overwhelming balance of indicia… in favour of an employment relationship’ between the applicants and CAO:

(i)                  CAO exercised, and had the right to exercise, control over the applicants’ work and all related matters;

(ii)                CAO provided and maintained the equipment used in the work;

(iii)               CAO allocated the applicants to crews and provided them with rosters which indicated when they were required to work;

(iv)              CAO had the right to dictate the place of work, hours of work and the like;

(v)                the work did not involve the applicants providing their own place of work or their own equipment;

(vi)              the work did not involve the creation of goodwill or saleable assets;

(vii)             the work did not involve the payment by the applicants of business expenses of any significant proportion, nor remuneration without the deduction of income tax;

(viii)           for all practical purposes, the right to dismiss or suspend the applicants was also exercised by CAO.

Nevertheless those indicia are essentially or equally reflective of a labour hire arrangement, except perhaps for (viii) above, which factor carries per se the handicap of the somewhat uncertain notion ‘for all practical purposes’, and tends therefore to beg the question as to de jure purposes and implications. 

97                  I was referred by the applicants again to Hollis, and to the segments appearing at [47] - [57] of the reasons for joint judgment of the High Court.  I have earlier extracted the text of [48]-[49] and part of [50] of that joint judgment, but I need say no more other than to repeat that the issue there was not, as here, the identification of the employer of persons having an acknowledged status as employees, but the identification of their employer in a tortious context.  I do not therefore consider sufficient assistance to be available here from further passages in Hollis.

The relief sought by Messrs Wilton and Cumberland against CAO

98                  The next subject arising is the applicants entitlement to the benefits of their respective employment agreements sought to be recovered from CAO. 

99                  It was asserted on behalf of the applicants that they were paid as casual employees under the MES agreement, and hence at rates of pay said to be ‘significantly less’ than the rates that applied to both permanent or casual employees under the 2000 and the 2003 Certified Agreements.  Those Agreements came into force respectively on 20 October 2000 for a term of three years and on 12 December 2003 for a further term of three years, and each related to ‘employees engaged in production and engineering functions at the Hunter Valley Operation’, in the case of the 2000 Agreement, and to ‘employees of the company performing production and engineering work’ in the case of the 2003 Agreement. 

100               The 2000 Agreement provided for the employment of casual employees in circumstances set out in cl 13  reading as follows:

‘13.      Part-time/Temporary/Casual Employees

 

The Company may engage additional employees to meet increased workloads or cover for holiday or other absences through the employment of part-time, temporary or casual employees.’

 

Appendix 1 set out the rates of pay for employees generally under the heading ‘Remuneration Structure’, and provided that casual employees would be paid on the following basis:

‘An employee engaged on a casual basis will be paid the hourly pro rata equivalent of the annual Base Salary for his/her classification, plus 25 percent with a minimum of 4 hours payment.  The 25 percent premium added to the hourly rate is in lieu of entitlements under Part 6 – Leave of this Agreement.’

 

It appeared to be common ground that each of the applicants fell within the description of casual employee. 

101               The 2003 Agreement addressed in clause 10 on pages 3 and 4 thereof the terms and conditions of employment of employees, including casual employees, as follows:

‘10.      Contract of Employment

 

Except for casual employees employment will be by the month.

 

The company may engage full-time, part-time, temporary or casual employees.

 

A Full Time employee is engaged as such on a normal working week of 40 hours, and is entitled to all provisions of this Agreement.

 

A Temporary Employee may be engaged for a fixed term up to 12 months or a fixed task on either a full time or part time basis.  A Temporary Employee is entitled to the provisions of this agreement except for Clause 16 – Redundancy.

 

A Part Time employee is engaged on a regular and predictable roster of hours less than full time, and will be entitled to the provisions of this Agreement in the proportion their average hours bear to full time hours.

 

A Casual Employee is engaged by the Company as such and paid by the hour for each hour worked.  The Casual Rate includes a loading in lieu of all leave entitlements (except Long Service Leave).  A Casual Employee has no entitlement to the provisions of Clause 16 – Redundancy, Clause 24 – Annual Leave, Clause 26 – Sick Leave, Clause 27 – Compassionate Leave, Clause 28 – Jury Service, Clause 29 – Parental Leave, and Clause 30 – Special Family Leave.  Clause 32 – Public Holidays and Clause 33 – Death Benefit. 

 

For the first 3 months of employment new employees will be probationary employees.

 

… .’

102               My attention was drawn by the applicants to Appendix 1 to the 2003 Agreement, which  provided for the following hourly rates for casual employees based on the roster actually worked from time to time:

‘Casual Rate

Dayshift                                         $35.57 per hour

2 Panel                                          $36.67 per hour

3 Panel                                          $37.46 per hour

6 day 2 panel                                $38.69 per hour

4 Panel                                          $44.96 per hour.’

 

103               The applicants acknowledged that the term ‘casual employee’ has no fixed meaning, citing Doyle v Sydney Steel Company Ltd (1936) 56 CLR 545 at 551, where Starke J provided the following description of the term:

‘The description “casual worker” is not one of precision: it is a colloquial expression, and where, upon all the facts, there is a reasonably debatable question whether the work is casual or regular, the question is one of fact for the commission.’

At 555, Dixon J (as he then was) described the term as follows:

‘But unfortunately what is casual employment is ill defined.  Indeed it is scarcely too much to say that it seems open to a tribunal of fact to treat most forms of intermittent or irregular work as casual.’

At 565, McTiernan J considered that the expression ‘is not capable of exact definition’, and that ‘[e]ach case is to be determined on its own facts…’. 

104               More recently in A/asian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd (1988) 24 IR 467 at 473, Gray J observed that the expression casual employee ‘does not have a recognised legal meaning’,so that any issue as to the terms on which a casual employee is engaged ‘becomes one of fact’.  Accordingly it would seem that the expression has not materially changed in meaning since the High Court’s decision in Doyle. 

105               Subsequently in Reed v Blue Line Cruises Ltd (1996) 73 IR 420, Moore J observed more illustratively at 425:

‘A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work.  Another characteristic is that there is no certainty about the period over which employment of this type will be offered.  It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.’

106               It was contended that in the light of the circumstances of the applicants’ employment in the HVO which I have sought to describe and exemplify, the Court should find that by the time of commencement of the claim period in July 2002, the full time and exclusive nature of the applicants’ employment at the HVO was such that they were permanent full time employees rather than casual employees for the purposes of the 2000 and 2003 Agreements. 

Calculations of the monetary value of the underpayments claimed by each of the applicants

107               Mr Wilton’s analysis of timesheet data relating to times worked by him for the weeks respectively ending 10 June 2001 to 20 January 2002, inclusive of day, night and afternoon shifts, was that the same averaged 49.19 hours per week, and Mr Cumberland’s analysis of that data relating to time worked by him for the weeks ending 15 July 2001 to 20 January 2002, similarly inclusively, was that the same averaged 43.32 hours per week.  Mr Wilton’s analysis of timesheet data relating to times worked for the weeks respectively ending 27 January 2002 to 15 May 2005, similarly inclusively as to day, night and afternoon shifts, represented an average of 40.38 hours per week and Mr Cumberland’s analysis relating to time worked for the weeks ended 27 January 2002 to 26 December 2004, again similarly inclusively, represented an average of 35.78 hours per week.  Those calculations in relation to Mr Wilton were said to indicate underpayments of $31,126.56 made up as follows:

                          2002/03 year                     $4,697.00

                          2003/04 year                   $13,584.25

                          2004/05 year                   $12,845.31

Those calculations in relation to Mr Cumberland were said to indicate underpayments of $47,912.45 made up as follows:

                                               2002/03 year    $8,410.00

                                               2003/04 year    $18,971.25

                                               2004/05 year    $20,531.20.

Outline of submissions of CAO in response to the submissions of Messrs Wilton and Cumberland

108               CAO outlined its case in response to that of the applicants Mr Wilton and Mrs Cumberland as follows:

(i)                  neither Mr Wilton nor Mr Cumberland ever entered into any contract arrangement with CAO;

(ii)                neither Mr Wilton nor Mr Cumberland ever entered into any contract of employment with CAO; and

(iii)               neither Mr Wilton nor Mr Cumberland was ever an employee of CAO.

The two key issues therefore arising for resolution were framed by CAO accordingly as follows:

(i)                  whether CAO and each of Messrs Wilton and Cumberland were in a contractual relationship;

(ii)                if that first issue should be answered in the affirmative, whether CAO and each of Messrs Wilton and Cumberland were respectively engaged in an employment relationship.

109               It was contended by CAO at the outset that in order to constitute an employment relationship, the asserted parties thereto must be in a contractual relationship.  So much was said to be at least implicitly exemplified by what appears in Byrne at 421 and 436.  Given the variety of ways that a relationship of employer and employee may come about, formally or informally, the effectuation or otherwise of an employment relationship will not necessarily be readily cognisable, as the discussions for instance in Ermogenous at [24] and following under heading ‘Intention to create contractual relations’ exemplify and in Dalgety Farmers at [4] imply, see also the reference of Kirby A-CJ at [5] of Dalgety Farmers as to the need ‘… to look to the circumstances of the engagement and to ascertain who it was that offered employment, and whether the worker accepted that offer’. 

110               CAO further submitted that on any traditional approach to the existence of a contractual relationship, including identification of matters as to offer and acceptance, ‘it is plain’ that [CAO] and each of the applicants were not in a contractual relationship’, for the following reasons:

(i)                  there was no intention to create legal relations between CAO and either of Mr Wilton or Mr Cumberland;

(ii)                the parties did not discuss or consider, let alone agree upon, the essential terms of a contract involving work, such as remuneration;

(iii)               none of the applicants engaged in conduct which showed that they regarded themselves as being employed by CAO;

(iv)              each of the applicants engaged in conduct which showed that they regarded themselves as having a contractual relationship with MES; and

(v)                MES engaged in conduct which showed that it regarded itself as having a contractual relationship with each of the applicants.

CAO expanded upon each of those reasons to an extent which I will seek to summarise below.  By the foregoing expression ‘create legal relations’, CAO used the same of course in a contractual sense. 

111               As to the existence of any intention or otherwise to create legal relationships, CAO stated that ‘it would be truly extraordinary if, from the requirement of [CAO] to supplement its labour force… by the supply to it… of MES’ employees …, one would conclude that [CAO] intended to enter into a contract of employment with each of the applicants’.  On the contrary, it was said by CAO to be ‘inherently improbable that despite it having made a contract with MES for the supply to it of MES employees to supplement its workforce and despite the fact that those supplied persons were to be paid by MES (which company would also look after their taxation and superannuation arrangements) and remain responsible for any disciplining of those persons for events occurring on the site of the client, [CAO] intended nevertheless to make separate and further contracts with each of the applicants so as to make them its employees’.  CAO submitted in that context that ‘such an intention would be the last thing that one would impute to [CAO]’, and further that such a proposition ‘defies logic – and is not a correct conclusion to reach on the facts’. 

112               The element of intention to create legal relationships was said by CAO to be approached by way of consideration of the following three matters:

(i)                  did CAO contemplate that it would create legal relationships with the applicants?

(ii)                was there any evidence of contemplation by any of the applicants that they would create legal relationships with CAO?

(iii)               was there any evidence of consent by CAO to the creation of legal relationships with either of the applicants? 

CAO submitted that all of the evidence was to the contrary of any intention on the part of either of the applicants or of CAO to enter into legal relationships respectively with each other.  By ‘legal relationships’, CAO appeared to include in particular contractual relationships.  I will address those three issues under the various headings as denoted or formulated by CAO and in the sequence laid out by CAO.  That sequence and its respective designations of subject matters addressed did not correspond at least entirely with the designations and sequences adopted in the applicants’ submissions, but so much need not matter for practical purposes. 

Intention to create legal relationships

113               The threshold contention of CAO on this critical theme was that it would be extraordinary, from the requirement of CAO to supplement its labour force, being a requirement which was intended be satisfied relevantly by the supply of employees of MES to CAO for a fee payable to MES, if it could be concluded that CAO intended to enter into a contract of employment with each of the applicants.  As I have foreshadowed, such a conclusion was said by CAO to be inherently improbable, in the light of CAO having entered into a contract with MES for the supply by MES to CAO of MES employees to supplement CAO’s workplace at the HVO (referring thereby to what I have earlier designated as the Supply Agreement), and further that the supplied persons:

(i)                  would be remunerated by MES;

(ii)                would be ‘look[ed] after’ by MES in relation to their taxation and superannuation arrangements; and

(iii)               would remain subject to the discipline of MES in relation to events occurring on the plant site of CAO.

CAO asserted moreover that ‘all of the evidence is to the contrary of any intention on the part of any of these parties to enter legal relations with each other’.  In so doing, CAO did not to my understanding put forward a case principally of subjective intention, contrary to what the applicants seemingly appeared to assert in the context of the applicants’ citation of Mead v New England Seed Traders Pty Ltd (1972) WCR (NSW) 113 at 117, where the following appears in the joint judgment of Kerr CJ and Hope JA:

‘In the financial records of the company Mr Mead and Mr Crofts were treated as employed workers, and they were similarly treated for taxation purposes.  These circumstances afford evidence, and indeed strong evidence, of contracts of service.  There is certainly evidence to establish that neither Mr Mead nor Mr Crofts realized that he was an employed worker, but while this may be some evidence to rebut the existence of contracts of service, it does not, in the circumstances, seem to be of very much weight.  The parties to a contract may well not be conscious either that the legal consequence of what they have done is the creation of an enforceable contract, or that the law will spell a contract of service out of their dealings.’

Lack of agreement on essential terms

114               On a related theme, CAO further emphasised at the outset of its case what it described as a lack of discussion between CAO and each of the applicants concerning remuneration or conditions of employment; I observe that remuneration would normally be an essential term of a contract for the provision of services at arm’s length.  I was referred in that regard to WorkCover Authority (NSW) (Inspector Robins) v Labour Co-operative Ltd (No 1) (2001) 108 IR 283 at [28] (per Hungerford J), reading as follows:

‘… In any event, the matters discussed between Mr Randall and Ms Lister in terms of the creation of a legally enforceable contract, as Mr Macken suggested occurred, simply did not exist – there was no mention of the wage rate to be paid, work to be performed (other than training), hours of work or conditions of employment generally; indeed, the omission of such matters, important as they are to the creation of a true legal relationship of employment as the consideration for any offer and acceptance.’

CAO pointed to what it described as ‘the lack of discussion concerning remuneration or conditions of employment’ as indicative of the lack of agreement on an essential term for a contractual arrangement involving personal services, and consequently of the non-existence of a contract. 

115               Reference may also be made to Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104, where the context was that the respondent carried on business of supplying labour by way of hire to builders, construction managers and contractors in the building industry, and the issue arose whether workers thus sent to building sites by the respondent were the respondent’s employees or the employees of the builder.  A Full Federal Court (Wilcox, Burchett and Ryan JJ) found that no contract of employment, however characterised, had been made between the worker and the builder to whom his labour was supplied, because the element of consideration essential to a contract of employment, being the promise by the presumptive employer to pay for services as and where rendered, was absent in that case.  In so finding, it was pointed out that the builder’s only relevant obligation in that context was to make payment to the respondent labour supplier. 

116               More recently in Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 to which CAO drew attention, Weinberg J of this Court addressed an issue as to the existence or otherwise of a binding contract of employment, and summarised the appropriate juridical approach at [182]-[183] as follows:

‘182.    It is clearly established that there cannot be a concluded agreement unless the parties are “of one mind” on all essential terms.  The test for determining whether a term is “essential” is objective.  One way of answering that question is to ask whether the contract would be “commercially viable” without such a term.  In relation to the agreement of further, non-essential, terms, the question to be asked is: did the parties intend that the agreement would not become binding until there was agreement on the further terms, or did they intend to be bound forthwith, even if there were terms still to be agreed.  In addition, there ought to be some indication that there has been an offer, and an acceptance of that offer, though many commercial dealings do not lend themselves to such an orthodox analysis.

183.     In determining whether the parties have reached a legally binding agreement, it is necessary to determine what is sometimes described as their objective intention.  The legal rights and obligations of the parties turn upon what their words and conduct would reasonably be understood to convey, and not upon their actual beliefs or intentions….  The objective approach is said to lead to a greater degree of certainty in contractual dealings and in their assessment by courts.  A party who on reasonable grounds supposes that he or she has entered into a contract with another cannot be defeated by a claim by the other that, despite appearances, he or she did not actually intend to enter into a contract.  

The conduct of the respective parties to the proceedings as indicative of the existence or otherwise of contractual relationships between each of the applicants and the respondent CAO

117               The next segment of written submissions of CAO may be summarised to the effect that there is no evidence which established that either of the applicants perceived himself to have been in a contractual relationship with CAO, for the following reasons:

(i)                  the applicants did not assert in evidence that they were employed by CAO during the course of their encounter with CAO;

(ii)                the applicants did not describe themselves in their respective applications to MES for employment in November 2004 as having been previously employed by CAO, but rather as each having been a ‘contractor’ at the HVO with ‘the contracting company’ (thereby referring to MES); I refer in that regard to their respective job application forms for permanent employment with CAO at the HVO appearing at pp 1045 and 1414 of Exhibit 1;

(iii)               the applicants did not describe themselves in their respective curriculum vitae as having been employed by CAO, but referred merely to their ‘employment history’, in the case of Mr Wilton as ‘Mining Earth Moving Services – 2001’, and in the case of Mr Cumberland as ‘Plant Operator – Mining Earthmoving Services Muswellbrook…’;

(iv)              Mr Wilton did not describe himself in his taxation returns as having been employed by CAO, but he identified MES as the payer of his salary and wages in each of the years 2001 to 2005.

In relation to that documentary material, it was pointed out by CAO that regard may be paid to subsequent conduct in order to ascertain whether a contract had or still existed (citing Brambles at [25] and Damevski at [85]), just as it is permissible to have regard to subsequent conduct in order to determine whether an intention to contract existed (Australian Broadcasting Corporation v XIVTH Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550, Gleeson CJ with whose reasons Hope and Mahoney JJA agreed and Damevski at [141] and [147]).

118               CAO pointed further to evidence that the applicants perceived themselves as having a contractual relationship with MES.  I was referred to a considerable body of affidavit evidence of each of the applicants, and their signed employment or application for employment forms relating to their subsequent purported employment by MES, together with employment undertakings, timesheets, superannuation documentation and leave applications.  Additionally each of the applicants spoke periodically to MES in relation to leave and pay matters, and otherwise to employment problems.  Mr Cumberland communicated with MES for example on the subjects of his having been stood down after an incident, and of his continuation of his status of casual employment, and of his having authorised his trade union to pursue legal proceedings against MES concerning the terms and conditions of his employment.  The union appears to have subsequently initiated and conducted proceedings on Mr Cumberland’s part against MES in relation to those matters.  Both of the applicants described themselves as MES employees in their respective applications to MES in November 2004 for permanent employment, and otherwise as having an employment history with MES.

119               Moreover MES attended to matters incidental to the applicants’ purported employment by MES such as payment of workers compensation insurance, superannuation and payroll tax, being matters said to evince further indicia of an employment relationship between MES and each of them, and a contractual relationship of employment in particular. 

Further incidental conduct of MES as indicative or otherwise of the existence of a contractual relationship between the applicants and MES

120               The next subject of CAO’s submissions related to what was described as the conduct of MES reflective of its perception as to being in a contractual relationship with each of the applicants.  I was referred in that regard to the following matters, being largely incidental to what I have already recorded:

(i)                  MES inquired back in June 2001 as to whether Mr Cumberland would be ‘interested in a job with us which would be at the HVO’; MES subsequently told Mr Cumberland that he would ‘… be employed by MES’;

(ii)                MES completed ‘Section B’ of a tax file number declaration form in respect of each of the applicants, being a form required to be completed only in respect of employees;

(iii)               MES arranged for Mr Cumberland to attend, and MES met the costs of Mr Cumberland attending, an examination at the JCB Health Service;

(iv)              MES completed a form for submission to Centrelink in respect of Mr Wilton;

(v)                MES required persons it regarded as employees to execute an ‘Employment Undertaking’ form, and did so in relation to each of the applicants;

(vi)              MES paid wages to each of the applicants and did so in accordance with the terms of the MES certified agreement;

(vii)             MES assigned to Mr Wilton a payroll number and issued pay slips to the applicants in respect of the wages it paid to the applicants;

(viii)           MES described Mr Cumberland in his pay slip at one stage as a ‘casual employee’;

(ix)              MES deducted taxation from the payment of wages it made to the applicants; moreover MES deducted other amounts authorised by the applicants from the payment of wages it made to the applicants;

(x)                MES made superannuation contributions on behalf of the applicants;

(xi)              MES paid workers compensation premiums in respect of the applicants;

(xii)             MES paid payroll tax in respect of the applicants;

(xiii)           MES completed the approved a section of an ‘Application for Leave’ form in respect of Mr Wilton;

(xiv)           MES approved the leave sought to be taken by the applicants;

(xv)            MES issued PAYG Payment Summaries to the applicants in 2001, 2002, 2003, 2004 and 2005;

(xvi)           MES supplied the applicants with an annual clothing allocation;

(xvii)         MES organised and conducted monthly occupational health and safety briefings which the applicants attended;

(xviii)        MES issued memoranda to the applicants, including a memorandum that stated ‘the toolbox meetings are mandatory’ and ‘must be attended’, and a memorandum that stated the manner in which timesheets were to be completed;

(xix)           MES issued memoranda to the applicants concerning the negotiations for a new certified agreement between MES and its employees;

(xx)            MES issued memoranda to Mr Cumberland for the purpose of disciplining him over incidents at the HVO; and

(xxi)           MES sent to the applicants a draft Australian Workplace Agreement. 

On the footing of that extensive material, CAO submitted that ‘[t]he obvious premise on which MES acted in taking these steps was that it was the employer of the applicants’. 

121               Largely in the light of the material to which I have thus far referred at the instance of CAO as bearing upon the critical issues arising, CAO contended that ‘the clear position’ was as follows:

(i)                  each of the applicants had entered into a contract with MES; and

(ii)                each contract was one of employment.

122               On a related issue, CAO next submitted that ‘it is plain that MES had entered into a contract with [CAO] for the supply by MES, for reward, of its employees to work at the HVO’, that situation being said to be exemplified by the following circumstances:

(i)                  between at least 1 June 2001 and 30 December 2004, CAO engaged MES to supply some of its workers at the HVO, including the applicants;

(ii)                between at least those dates, CAO submitted formal purchase orders to MES in respect of the work performed by the purported workers of MES;

(iii)               between at least those dates, MES submitted an invoice to CAO on a weekly basis in respect of the work performed by the workers of MES to CAO;

(iv)              between at least those dates, CAO paid MES the amounts specified in such invoices;

(v)                in August 2002, CAO invited MES to tender for the subject contract for the supply of workers to CAO;

(vi)              on 21 August 2002, MES submitted a tender in response to that invitation;

(vii)             from August 2002 to August or September2003, CAO and MES dealt with each other on the basis of the terms of that invitation and tender;

(viii)           in August or September 2003, CAO and MES entered into the two year contract comprising what I have already referred to as the Supply Agreement; of particular relevance was said by CAO to be those provisions thereof bearing the following headings:

(a)        Section 1 ‘Appointment of Supplier’ (especially clauses 1.1 and 1.2(a));

(b)        Section 2 ‘Supply arrangements’ (especially clauses 2.2, 2.3(b) and 2.11);

(c)        Section 3 ‘Payment’ (especially clauses 6.1 to 6.4);

(d)        Section 8 ‘Representations and Warranties’ (especially clauses 8.3 and 8.7);

(e)        Section 12 ‘Indemnities’ (especially clause 12.2);

(f)         Section 13 ‘Insurances’ (especially clause 13.1(a));

(g)        Section 14 ‘Performance’ (especially clause 14.1);

(h)        Section 22 ‘Relationship of Parties’ and

(i)         Appendix 4 ‘site Conditions’ (especially clause 4.3).

123               In the foregoing context, and in particular of the numerous matters which I have above recorded in this present segment addressed by CAO’s submissions, CAO further submitted that ‘there was no need for [CAO] to enter upon a contract [of employment] with either of the applicants, and no reason why it would want to do so’.  CAO pointed out moreover that given its commercial relationship with MES and the agreement under which MES supplied employees to CAO, there was ‘every reason to conclude that the last thing that [CAO] wanted to do was to take on, as its own employees, the employees of MES (including the applicants)’. 

Lack of evidence on other issues bearing upon the existence of any employment relationship as between CAO on the one hand and Messrs Wilton and Cumberland on the other

124               CAO contended that there was no evidence concerning ‘other issues material to the existence of any contractual relationship’ between CAO and either of the applicants’, for the following further reasons:

(i)                  there was no evidence of any offer of employment being made to either of the applicants by CAO, other than by MES to Mr Cumberland; that evidence appears in Mr Cumberland’s affidavit of 3 May 2006 at pars 8 and 9, and related to a telephone call made to Mr Cumberland by Mr Hann of MES in May or June 2001, and to a prior meeting between them in Mr Hann’s office at MES, in the course of which Mr Hann enquired of Mr Cumberland’s interest in working at the HVO;

(ii)                there was no evidence of an offer of employment having been made to either of the applicants by MES as agent of CAO, and no evidence otherwise of any agency relationship between CAO and MES;

(iii)               there was no evidence of an acceptance by CAO of any  offer of employment from either of the applicants;

(iv)              there was no evidence of any discussion between CAO and either of the applicants concerning remuneration or conditions of employment for work to be performed at the HVO;

(v)                there was no evidence of any document recording the key terms of the relationship between CAO and either of the applicants;

(vi)              there was no evidence of any promise on the part of CAO to pay or provide other benefits to the applicants, for the services they rendered; and

(vii)             CAO did not pay the applicants otherwise for the work each undertook at the HVO.

Overall position of CAO on general analysis

125               CAO submitted that in substance and reality, the applicants entered into a contract with and were each employed by MES, and their attendance at the HVO to perform work pursuant to that contract involved no ‘distinct offer of employment’ by CAO, nor ‘an acceptance of such employment by the applicants’.  CAO referred by way of analogy to Swift Placements Pty Limited v WorkCover Authority of New South Wales (2000) 96 IR 69 at [38], where the following appears in the judgment of the Full Court of the Industrial Relations Commission of New South Wales in CourtSession (Wright, Walton and Hungerford JJ):

‘38.      Shortly stated, Mr Terkes obtained the work from the appellant and agreed to perform it on the appellant offering it to him; attendance by him at Warman’s premises to commence and continue performance of the work involved no separate or distinct offer by Warman nor acceptance by Mr Terkes.  It follows, in our view, that to the extent any legal relationship existed it did so between the appellant and Mr Terkes, although, of course, the nature of such relationship is another question.’

Mutual assent analysis

126               CAO acknowledged that the concept of a contract existing by mutual assent has been recognised in circumstances where the traditional analysis of offer and acceptance is inappropriate.  I have earlier cited dicta (see [31] to [34]) in that regard appearing in Brambles, Integrated Computer Services and Damevski.  In his concurring judgment in Brambles, Mason P referred to ‘the difficulties of pressing too far classical theory of contract formation based upon offer and acceptance’.  At the bottom line there must be satisfied at least the notion or test of mutual assent, viewed objectively from the point of view of reasonable persons on both sides to the objective candidature for establishment of a concluded bargain.  Further in Brambles at [81], Heydon JA observed that ‘[i]n the light of the above cases, it is relevant to ask: in all the circumstances can an agreement be inferred?  Has mutual assent been manifested?  What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?’  Merely because some dealings have occurred between the prospective parties to a bargain does not necessarily mean that a contract exists.  As McHugh JA said further in Integrated Computer Services at 11,117, ‘[t]he question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement’, to which his Honour added ‘[t]he conduct of the parties, however, must be capable of proving all the essential elements of an express contract’.

127               CAO contended that the kind of circumstances in which a contract has been found to exist by mutual assent are far removed from the present case.  CAO pointed to the absence in particular of evidence to suggest that:

(i)                  CAO contemplated that it would employ the present applicants;

(ii)                the applicants contemplated that CAO would employ them;

(iii)               CAO contemplated the remuneration it would pay or the terms of conditions it would provide to the applicants or either of them;

(iv)              the applicants contemplated the remuneration they would be respectively paid by CAO or the terms and conditions which he would be afforded by CAO;

(v)                the applicants made an offer or communicated a view upon the basis whereof they would provide services to CAO;

(vi)              either of the applicants began to provide services to CAO in accordance with any such offer or view; moreover CAO had a reasonable opportunity to reject any such offer or view, yet CAO instead took the benefit of the services provided by each of the applicants;

(vii)             CAO acted on the basis that either of the applicants were providing services to it, and that they were providing their services in accordance with a previous offer made or view communicated by them;

(viii)           CAO acted in such a way, or engaged in a course of dealing, which was consistent with accepting an offer put or view communicated by either of the applicants;

(ix)              CAO accepted performance of the respective applicants’ work on the basis that it would pay the applicants for those services;

(x)                CAO was notified that the applicants regarded themselves as employees of CAO, and failed to negative that assertion. 

128               In the context moreover of the framework by CAO of issues and contentions, CAO emphasised that inclusion of a term or condition as to remuneration was normally an ‘essential term’ for expression in contracts for the provision of personal services, and submitted that what it described as the lack of contemplation or discussion relevantly as to remuneration meant that CAO did not have an agreement with either of the applicants on essential terms.  I was referred in that regard again to Australian Broadcasting Corporation, where Gleeson CJ at 552 described ‘the price’ being ‘the most important subject of their transaction’.  CAO further emphasised that the applicants bore the onus of proof of the formation of an agreement referrable to essential terms.

129               CAO next addressed the relevance of control to the establishment of a contractual relationship and submitted to the negative of any proposition to that effect.  I was referred to Swift Placements at [31], where the following appears:

‘Here, of course, Mr Terkes operated the machined owned by Mr Warman and at its premises, but, unless Warman engaged him to do work for it on certain terms then the fact it may have had a degree of control over such work would count for little other than as providing some evidence that it may have employed him.’

A further exemplification of judicial discussion of the significance of control to the existence or otherwise of a contract of service in favour of a worker may be found in Teen Ranch Pty Ltd v Brown (1995) 87 IR 308 where the New South Wales Court of Appeal (Handley JA, with whose reasons Mahoney and Powell JJA agreed) withheld from finding that a binding legal relationship of employer and employee was established in relation to an injured volunteer worker at a religious camp, in circumstances, where that person’s volunteer work at the camp fell within the description of ‘[f]amily, social and domestic arrangements’ (at 310); accordingly that injured person was held not to qualify for workers compensation, as an employee the subject of a contract of employment. 

130               In any event, the fact that CAO did exercise ‘some control’ in relation to the applicants was said by CAO not of itself to lead to a conclusion as to the existence of any contractual relationship.  That was said to be because the existence of a measure of control by CAO of each of the applicants reflected merely the arrangement between the applicants and MES that the applicants would accept and obey the ‘legal and reasonable directions’ from CAO, that arrangement and no more being said to be exemplified by the following circumstances:

(i)                  Mr Cumberland’s signed document of 9 July 2001 (earlier extracted at [19] in these reasons) by which he understood and agreed ‘[t]o follow all legal and reasonable directions given [to] me by the client’s nominated person’;

(ii)                Mr Cumberland’s signed document of 14 May 2002 (also earlier referred to in these reasons), which contained an undertaking to similar effect;

(iii)               each of the applicants testified by affidavit as to his understanding that the terms and conditions of his employment were governed by the MES Agreement (referred to in [4] above) which contained the following:

‘[MES] and/or the representative of the customer may direct employee/s to carry out any work which is within the skills, training, experience and knowledge of employee/s, and subject to safety and statutory requirements’ (clause 9.1)

 

‘All employees will, at all times, comply with [MES] and customer policies and rules as from time to time varied.’ (clause 9.4)

 

‘An employee is required to work reasonable overtime, as requested by [MES] and/or its customer/s…(cl 15)’;

 

(iv)              MES directed its employees, during the toolbox talks which it conducted, that while working at the HVO, they were under the direction of a particular supervisor (as Mr Touzell testified in par 81 of his affidavit evidence).

131               CAO therefore propounded the so-called ‘overall position on the contractual relationship’ as being that neither of the applicants was in a contractual relationship with CAO, and that each of the applicants was hence incapable of being in an employment relationship with the CAO.

The conduct and functions of the respective parties as indicative or otherwise of the existence of an employment relationship between the applicants and CAO – an overview of authority and its operation here as put forward by CAO

132               CAO’s alternative case was that in any event, there was no employment relationship between itself and either of the applicants, irrespective of the existence of any contractual relationship between itself and either of the applicants. 

133               There is a body of authority bearing on the foregoing subject to which I have already made reference starting at [26] of these reasons, for instance Stevens, Hollis and Damevski.  Attention was drawn by CAO also to ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006)153 IR 228 and BHP Billiton Iron Ore Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2006) 151 IR 361, which will shortly be discussed.  The majority of those decisions were made in the broader context of determining whether a particular worker was an employee or else an independent contractor of the beneficiary of his or her work.

134               The effect and operation of that line of authority may be outlined as follows:

(i)                  the totality of the relationship is to be considered; thus in Stevens, the following appears in the reasons for judgment of Mason J (as he then was) at 24:

‘But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment.  The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question.  Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee.’

To that dictum may be added what I have earlier cited at [26] of my reasons from the joint judgment of Wilson and Dawson JJ in Stevens;

(ii)                in the most recent of the foregoing five authorities above recorded (ACT Visiting Medical Officers), a Full Federal Court comprising Wilcox J, myself and Stone J in a joint judgment applied the principles emerging from analogous authority for the purpose of characterising relevantly the visiting medical officers engaged by public hospital authorities to provide medical services to public patients; the Full Court observed the practical realities inherent in the circumstance that in the course of their treatment of patients undertaken at the hospitals, the visiting medical doctors ‘moved seamlessly between patients in the two groups’, being both private and public patients, as an integral part of the businesses that each of those doctors individually carried on;

(iii)               in BHP Billiton the person at the centre of the dispute had been employed by BHP Billitonand its precursors as a locomotive driver until he was made redundant in 1999; in 2001 he applied successfully for employment with a labour hire company then supplying contract drivers to BHP Billiton; from that time to 2004, and while directly employed by the labour hire company but working at BHP Billiton, he applied for advertised direct employee position with BHP Billiton on four separate occasions but was unsuccessful each time; the Union alleged that BHP Billiton had unreasonably refused to employ him, and that he was in any event jointly in the employ of entities inclusive of BHP Billiton; declaratory relief was sought to that latter effect, as was also an order in any event that such person be employed by BHP Billiton on an award; in the course of decision-making the Industrial Appeal Court of Western Australia was required to consider the Union’s case that the person concerned was an employee of BHP Billiton according to ordinary concepts; the Union submitted that the correct approach to deciding the question as to the existence or otherwise of an employment relationship was to have regard to the totality of the relationship, citing inter alia in that context Hollis and Stevens.  At [114] in the reasons for judgment of Le Miere J, with whose reasons Wheeler J agreed and Pullin J at least substantially agreed, it was observed as follows:

‘In Hollis v Vabu and Stevens v Brodribb Sawmilling Co Pty Ltd the High Court set out the common law principles for distinguishing between an employee and a contractor.  These principles do not embody a definition of employment as such.  They rely instead on a test which involves the consideration of a number of established factors or indicia, some of which are characteristic of a contract of service and others of which suggest a non-employment relationship.  The task of the court which must assess the employment status of a worker is to consider the parties’ relationship in light of each of these indicia and to determine, on balance, into which legal category the relationship falls.  The exercise is not a mechanical one.  Rather it is a matter of obtaining the overall picture from the accumulation of detail.’

135               CAO submitted that the operation relevantly of the reasons for the respective decisions in Stevens, Hollis, Damevski, ACT Visiting Medical Officers and BHP Billiton, somewhat repetitively as in the preceding paragraph, as follows:

(i)                  the totality of the relationship in issue between the parties is to be considered;

(ii)                the measure of control exercised by a putative employer over a worker is a prominent factor but not the sole criterion; and

(iii)               other factors include the manner in which work is performed, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and entitlements to leave, the deduction of income tax, the delegation of work by the putative employee, the presentation to the public of the putative employee as an emanation of the putative employer, the supply of a uniform and the description by the parties of their relationship in the contract the subject of consideration.

136               CAO emphasised that the importance of those factors will vary with the circumstances, no single factor being normally determinative, and that a balancing exercise is to be undertaken in relation to all of the relevant factors (ACT Visiting Medical Officers at [19]-[20], [27] and [30] and BHP Billiton at [114]).  CAO pointed out additionally that the fact that a party is benefited by the activities of a person is not a sufficient indication that the person is an employee, pointing thereby to Hollis at [40], where in the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, the following observation was made:

‘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.’

137               Specifically as to the importance of the notion of control, the focus of that expression was said by CAO to reside in the right of the putative employer to exercise the same with focus on ‘ultimate authority’ over the employee as to the apparent origin of the judicial use of that latter expression.  CAO invoked the observations made by the South Australian Full Court in Mason & Cox Pty Ltd v McCann (1999) 74 SASR at [29], where Doyle CJ (with whose reasons Mullighan J agreed) said that emphasis is upon ‘… the importance of the legal right to control rather than the practical fact of control’, being an emphasis attributed to the following dictum of Dixon J (as he then was) in Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404:

‘The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.’

138               Attention was then returned by CAO to what I have extracted above at [139] from the dictum of Mason J (as he then was) in Stevens, and additionally to what preceded the same by the way of following observations of his Honour at [24]:

A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter.  It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it.’

In the light of his Honour’s observations in Stevens which I have cited both earlier and immediately above, the existence of actual control residing in the entity conducting labour hire operations may not have the same significance in a labour hire context. 

139               It is also instructive to retrace the evolution of Australian authority to Drake Personnel Ltd v Commissioner of State Revenue (2000) 2 VR 635 at [54], in the context of a pay-roll tax dispute, in which Phillip JA (with whose reasons Buchanan J agreed, as did Ormiston JA whilst adding observations of his own), said as follows:

‘All of this is very helpful here, for it indicates that in a case like the present where A makes an agreement with B under which A supplies to B the services of C for the performance of work and A also makes a contract with C for C to perform the work for B, it can be said readily enough, that in performing the work C not only benefits B but is also advancing the business of A, to the benefit of A.  It is true that the High Court was considering a statutory definition serving to extend the concept of employment; but it seems to me to follow that a temporary, in accepting an engagement to perform work for Drake’s clients, is doing the work as much for Drake as for the client….’

Phillips JA referred to a number of authorities, including Stevens, and at [56] continued as follows:

‘In cases like these, we are often instructed to stand well back to assess the situation, after first having regard to the detailed facts.  Standing back, it seems to me that in this case the subject matter of the contract between Drake and the temporary is casual employment.  Once that step is taken, the rest falls into place.  Drake can be seen, in a relevant sense, to be employing the temporaries to do casual work, albeitthat the contract between the temporary and Drake arises only upon the temporary accepting the offer of work through Drake.  The arrangement made with Drake is for casual work: the temporary is to go to the designated work-site and perform work according to the directions of the designated employer for the day; that all flows from the contract made by the temporary with Drake.  Tomorrow – or next week or next month – it will be a different work-site and a different temporary employer, but again that will be the consequence of the temporary accepting an offer from Drake and a contract arising between Drake and the temporary.’

His Honour’s conclusion on this point was relevantly at [57]:

‘Accordingly, if one looks at the matter “from a distance” as it were, the conclusion that the temporaries are employees of Drake according to ordinary concepts of the common law is one which not only can be supported but is I think required: the temporaries are engaged by Drake to perform casual work and the difficulties inherent in this case arise, first, from the very nature of casual work as impermanent and, secondly, from the fact that the contract between Drake and the temporary involves the temporary’s doing work for and at the direction of a third party, Drake’s own client.  But given the contract made by the client with Drake and the contract made by Drake with the temporary, it seems to me perfectly consistent to conclude that the temporary is the employee of Drake in the relevant sense at common law.’

140               The evolution of Australian authority, in particular in a labour hire context as here, may next be made to Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1 at [106]-[107], where the following appears in the comprehensive reasons for judgment of McDougall J (the abbreviated references below to Forstaff being to a labour hire company and to the client of Forstaff being to the operator of the business for whom a relevant worker undertook working duties):

‘106.    I think it is clear that, when a worker accepts an offer of work and goes to the client’s premises to perform that work, the worker is subject to the immediate control and supervision of the client.  The client must:

            (1)     Explain to the worker the precise nature of the work to be done.

            (2)     In most cases, supply the worker with appropriate clothing (including safety clothing) and tools and equipment.

            (3)     Direct or control the worker in the performance of his or her work.

107.     The direction and control that the client has arises, I think, de facto rather than de [jure].  That is because … there is no contractual relationship between the client and the worker.  The worker is bound, by the terms of his or her contract with Forstaff, to accept “the care, control and supervision of [the]client” and acknowledges “the right of [the]client to direct mywork activities”.  If the worker does not accept the care, control and supervision, or direction, of the client then the client may terminate the assignment.  But the client is doing so pursuant to its contract with Forstaff, the effect of which the worker acknowledges in his or her contract with Forstaff.’

His Honour held in Forstaff that since a contract of employment will normally come into existence whenever a labour hire company offers and a worker accepts an assignment of work from a client of the labour hire company, there was no contractual relationship accordingly in operation between the worker and that client of the labour hire company.  His Honour referred in that context to the indicia at [118] as tending to indicate the existence of a contractual relationship of employment, being the deduction of PAYE tax, the arrangement and payment of superannuation, the arrangement and payment of workers compensation insurance, entitlement to overtime, penalty rates, public holidays and other allowances.  As to indications to the contrary, his Honour referred to the absence of entitlement to holidays or sick leave. 

141               CAO submitted that the extent of control in a labour hire context is of less significance than in the normal employment context, and my attention was further drawn to the reasons for judgment of Merkel J in Damevski at [162], where his Honour referred briefly to Mason & Cox at [24]-[29] and Drake Personnel at [55] and observed that the entitlement of an employer to direct a purported contractor is ‘... relevant in determining whether an employment relationship exists although it is not as important as it may once have been, particularly in a labour hiring agency context’.  In such a context, the fact that the client determines the hours of work should not preclude the existence of a contract of employment between a labour hire company and the worker, CAO thus contended and in my opinion rightly.  CAO submitted moreover that ‘[s]ignificantly, the test for whether or not a contract is one of employment is not the “organisation test”, which was identified by Mason J in Stevens at 26-29 and Wilson and Dawson JJ at 35-36, and where his Honour indicated at [27]-[28] that he was ‘… unable to accept that the organisation test could result in an affirmative finding that the contract is one of service when the control test either on its own or with other indicia yields the conclusion that it is a contract for services’, because ‘[that] test does no more than shift the focus of attention to the equally difficult question of determining when a person is part of an organisation such that his wrongs may be imputed to that organisation’.  Again of course as I have earlier emphasised, his Honour’s consideration did occur in an immediate context of vicarious liability in tort, but nevertheless that dictum provides a measure of guidance in contexts involving issues as to the existence or otherwise of an employment relationship in an industrial setting. 

142               As to the applicants’ submission in favour of the operation and satisfaction affirmatively of the control test in the present circumstances concerning each of the applicants, CAO responded comprehensively as follows:

(i)                 there was little scope for CAO to control the manner in which the applicants operated the machinery used at the HVO, since the applicants were skilled and experienced in the use thereof and were in a physical sense left alone by CAO (or expected to be left alone in the course of the operations which each undertook) to operate the equipment each of them was using for the time being ‘without interference’ by CAO, other than in relation to safety concerns;

(ii)                CAO directed the applicants as to the equipment each was to operate for the time being whilst engaged at the HVO, and in relation to the areas in which to operate the same, the giving of such directions reflecting the arrangement between the applicants and MES that the applicants would accept directions from CAO;

(iii)              CAO supervised the applicants to ensure that they performed work in accordance with the contractual arrangements between CAO and MES; I was referred to clause 14.1 of the Supply Agreement, which reads as follows:

‘14.1    The Company will monitor your performance under this contract’;

(iv)              CAO and statutory officials such as the OCEs also supervised the applicants in relation to the discharge of their obligations under safety legislation, in particular the CMR Act, the CMG Regulation and the OHS Act;

(v)               the applicants conducted themselves implicitly upon the basis that they were responsible to the CAO supervisors, but only in the sense that those supervisors were responsible for allocating individual tasks for the time being to the applicants, including tasks undertaken in the CAO area to be worked and the machinery to be operated;

(vi)              CAO did not undertake any ‘disciplinary action’ in relation to the applicants, and in that regard, the evidence was said by CAO to disclose that:

(a)        CAO did not counsel or warn the applicants;

(b)        CAO did not take corrective or punitive action against the applicants;

(c)        the only action that CAO took towards Mr Cumberland as a result of the first relevant incident (involving a dozer coming into contact with a grader) was to discuss the need to ensure that the work area was clear prior to his proceeding to drive the dozer into the area, being conduct said not to constitute disciplinary action;

(d)        the only action that CAO took towards Mr Cumberland as a result of the second relevant incident (involving the driving of a dozer close to a shovel) was to require him to participate in a communication audit, being action said by CAO not to have constituted disciplinary action but rather a measure designed to ensure safety at the HVO;

(e)        the only action that CAO took towards Mr Cumberland as a result of the third relevant incident (involving the driving of a water cart into a stand pipe) involved discussion with him as to the need to exercise caution whilst operating the cart, being action said by CAO not to constitute disciplinary action;

(f)         the only action that CAO took towards Mr Wilton involving his early finish of a shift was to discuss the need for him to manage his time better, being action said also not to constitute disciplinary action;

(g)        the only action that CAO took towards Mr Wilton involving his taking of an extended crib break was to state that such conduct should not happen again, and that he was to be cognisant of the length of crib breaks in the future, being action that was said not to constitute disciplinary action; in that regard Mr Wilton seemingly acknowledged that MES was the only party who could control his earning capacity.

(vii)            MES continued to exercise a measure of control over each of the applicants; I was referred in that regard to the following examples of that exercise of control:

(a)        after the second incident involving Mr Cumberland, MES took disciplinary action against Mr Cumberland, including the provision of counselling, the giving of a warning and his standing down for the time being from the HVO;

(b)        after an incident involving Mr Wilton finishing a shift early, MES discussed that conduct with Mr Wilton in order to obtain a commitment that it would not occur again;

(c)        MES required the applicants to complete timesheets, though MES also required the applicants to have their timesheets counter-signed by CAO;

(d)        MES required the applicants to attend tool box meetings on a monthly basis;

(e)        MES counselled Mr Cumberland in relation to his late attendance at a particular tool box meeting and sent memoranda to him over his late attendance at tool box meetings generally;

(f)         MES required the applicants to complete MES forms from time to time;

(g)        MES sent a memorandum to Mr Wilton concerning a record of observation in relation to his conduct; and

(h)        MES required the applicants to submit to alcohol testing.

143               CAO submitted additionally that the evidence did not support a conclusion other than that the ultimate legal control over each of the applicants resided with MES, and further that although CAO could forbid the applicants to enter the mine and could restrict their movement on the mine site, that situation was no different from what applied to any person present on the mine site or seeking to enter the mine site.  Moreover CAO emphasised that the factor of control was only one factor to be considered in assessing the existence of an employment relationship, and was not a determinative factor; I was referred in that regard to ACT Visiting Medical Officers at [19] and [27].  As to the proposition that a person accepting superintendence or control of another person did not necessarily mean that the person became an employee, I was referred to Queensland Stations Proprietary Ltd v the Commissioner of Taxation (1945) 70 CLR 539 at 552, Stevens at 36 and Ready Mixed Concrete (South East) Ltd v Minister Of Pensions and National Insurance (1968) 2 QB 497 at 526 (MacKenna J); that dictum in Ready Mixed Concrete at 526 included the following:

‘A man does not cease to run a business on his own account because he agrees to run it efficiently or to accept another’s superintendence.’

144               CAO’s submissions then moved to what were described as important reasons for the exercise by it of supervision, certain aspects of which related to contract workers involved at the HVO, such as the applicants.  CAO referred in that context to the following CAO requirements and practices, and the reasons therefor:

(i)                  the requirement that contract labour workers ‘sign-in’ and ‘sign-out’ of the HVO was for safety reasons, being in particular to ensure that no person was left at a pit at the conclusion of a shift;

(ii)                the requirement that contract labour workers swiped their access cards at the card reading machine at the HVO was also for safety reasons, being to ensure that workers had completed the necessary induction, and to further ensure that no person was left at the HVO in the event of an evacuation, and also to enable the monitoring of hours worked as an incident to fatigue management;

(iii)               the requirement that contract workers (inclusive of the applicants) had their timesheets signed by an officer of CAO (being a requirement imposed by MES) was to verify the hours worked by each contract worker;

(iv)              the requirement that contract workers (inclusive of the applicants) informed CAO of an inability to attend work at the HVO, by reason for instance of sickness, and being a requirement imposed in part at least by MES, was to enable CAO to make arrangements for another person to take the place of the worker;

(v)                the requirement that contract labour (including that of the applicants) should notify CAO of an intention to take leave, a requirement which was imposed at least in part by MES, was to enable CAO to make arrangements for another person to take the place of the worker;

(vi)              the provision of a pre-shift briefing by an OCE employed by the CAO related to the obligations under ss 37 and 42 of the CMR Act to enforce the observance of the CMG Regulation, including an obligation that an OCE ‘give to those workers [under the charge of the OEC] such instructions (orally or in writing) as are necessary for them to comply with’ the CMR Act and the Open Cut Regulations (until such legislation was repealed);

(vii)             the concerns of CAO as to the taking of an extended crib break reflected the so-called knock on effect which a delay in recommencing work had upon subsequent shifts at the HVO;

(viii)           the treatment of all workers (whether they were employees of CAO or so-called contract labour) in a similar manner reflected the obligations imposed on an OCE pursuant to the CMR Act and the CMG Regulation; and

(ix)              the conduct of random drug and alcohol tests was consistent with a Mine Manager who worked for CAO discharging his or her obligation under s 37 of the CMR Act to enforce the observance of the CMG Regulation (until its repeal), including the requirement of s 43(3) of the CMG Regulation that a person not attend work at a mine if ‘impaired through the consumption of intoxicating liquor or drugs’.

145               It was next emphasised by CAO that it bore comprehensive obligations pursuant to safety legislation, including the CMR Act, the CMG Regulation and the OHS Act; by way of one example, it was and remained obliged, pursuant to s 8(2) of the OHS Act, to ‘ensure that people (other than the employees of the employer) are not exposed to risks to their health and safety arising from the conduct’ of the employer’s ‘undertaking’.  In relation to the analogous statutory obligation of an employer ‘… to ensure the health, safety and welfare at work of all employer’s employees’ imposed by s 15(1) of the precursor Occupational Health and Safety Act 1983 (NSW), it was said in Carrington Slipways Pty Ltd v Callaghan (1985) 11 IR 467 at 470 (Watson J) that ‘the words “to ensure” are to be construed in… their ordinary meaning of guaranteeing, securing or making certain’.  It was pointed out by CAO that the HVO remained at all material times a so-called controlled safety environment, as was acknowledged at least by Mr Wilton.

146               It was pointed out by CAO moreover that the obligation to ensure the safety of workers extended to every person working on site, whether as permanent employees, contractor personnel or some other persons; so much was said to have been testified by each of Messrs Wilton, Hendriks and Sargent.  Moreover Mr Sargent further testified as to what CAO described as its proactive approach to safety precautions by way of policies and procedures designed to minimise safety risks to contractor personnel.  Of course as an owner and occupier of its Ravensworth or Hunter Valley Operations, (to which I have been abbreviating as HVO), CAO would be subject to tortious duties of care in relation to visitors and other entrants and occupiers for the time being, irrespective of statutory liabilities flowing from its CAO mining operations. 

147               CAO therefore submitted that the circumstances of exercise of control on its part, such as they were, did not demonstrate that CAO and the applicants were mutually involved in any employment relationship, and further that the explanation for the exercise by CAO of direction and supervision, to the extent of those CAO activities which took place, reflected the CAO case that the applicants were each employees of MES who had been supplied by MES to CAO in or towards discharge of the contractual obligations of MES to CAO. 

148               It was further submitted by CAO that the manner in which the applicants performed work at the HVO, including their respective acceptances of directions of and supervision by CAO, reflected the contractual arrangements as between MES and the applicants, for which CAO contended, as well as the observance and performance of the statutory safety obligations imposed upon CAO and its relevant statutory officeholders.  It was said in that regard that those factors did not support the applicants’ contention that CAO and each of the applicants were placed in an employment relationship according to the general law, and that the explanations given in evidence for the manner of performance of work supported the CAO case that the applicants were employees of MES who had been supplied by MES to CAO in order to fulfil the contractual obligations of MES created by the Supply Agreement continuing in operation between CAO and MES.

Other factors contended by CAO in support of its case in denial of liability for the applicants’ claim made upon and in relation to CAO

149               CAO characterised the applicants as contract labour, due to their engagement through the retainer of a staff employment firm such as MES, and thus not directly by CAO.  By way of contrast, CAO described the persons directly engaged by it as ‘permanent employees’ (and as so described in these reasons).  The applicants were said by CAO to be at least inferentially aware that they were treated by CAO as contract labour.  That factor was described by CAO as alone supportive of the proposition that CAO and each of the applicants was not engaged in an employment relationship with one or more of the others. 

150               CAO emphasised of course that MES paid the applicants monies described as wages, and made such payments to the applicants directly and on a weekly basis, and before the time when it would be remunerated in respect thereof by CAO; in that regard, MES provided pay slips directly to the applicants.  Moreover MES deducted income tax from the salaries it paid to the applicants and presumably therefore remitted the amounts so deducted directly to the Australian Taxation Office.  Consistently with that course, MES made superannuation contributions on behalf of the applicants to the superannuation fund manager.  Thus it was contended by CAO that it did not reward the applicants as such in any monetary sense for or in respect of the work they performed at the HVO.  Those factors further support the proposition that CAO and each of the applicants were not engaged in an employment relationship at any material time. 

151               Moreover as foreshadowed earlier, MES supplied the applicants with work wear for at least most of the time (as Mr Wilton and Mr Cumberland testified), inclusive of safety gear such as helmets, safety glasses, torches, ear muffs, and a crib bag.  That factor of supply was asserted by CAO to be neutral upon the issue whether or not CAO and the applicants were in an employment relationship.  That was said to be the case given that CAO supplied the mining equipment used by the applicants. 

152               The obligations of the applicants to attend the HVO workplace was explained by CAO to be different to those of the so-called typical employee in the general workforce, in that each of the applicants had the right to take ‘leave’ when they wished to exercise the same, provided that he arranged for a replacement worker either directly or through MES.  That asserted right was described by CAO as being further indicative of the circumstance that CAO and each of the applicants were not placed in an employment relationship inter se. 

153               CAO submitted that there was no evidence to the effect that it held out to ‘the world at large’ that the applicants were part of its mining and industrial enterprise, and on the contrary, CAO pointed to the circumstance that MES supplied the applicants with work wear which was badged with the MES logo.  CAO submitted further that ‘on one view, the supply of work wear badged with a MES logo supports the position that [CAO] and each of the applicants were not in an employment relationship’.  However, CAO conceded that such a factor is ‘not as strong as some of the other factors’. 

154               Other factors said by CAO to be relevant to and supportive of its case included the following:

(i)                  CAO notified the applicants from time to time that they were not required to work a shift and hence did not make payment to the applicants (or MES) for working that shift;

(ii)                CAO notified the applicants from time to time that they were not required to work for the balance of a shift, and accordingly paid MES for four minimum hours work only in relation to that shift;

(iii)               CAO did not pay MES if the applicants were sick and did not attend for work at the HVO;

(iv)              CAO required the applicants to arrange a replacement worker if they wished to take any ‘leave’ which would have the effect of causing the shift to be ‘short-staffed’, or if they wished to take any ‘leave’ at all;

(v)                CAO did not arrange cover in respect of the applicants through its workers’ compensation insurance arrangements; MES provided such coverage and met the premiums associated therewith;

(vi)              CAO did not make payment of payroll tax based on the wages paid to the applicants; MES duly paid all such payroll tax.

155               CAO then pointed to the following further circumstances said to exemplify the reality that it treated the applicants differently from the persons it purportedly regarded as CAO employees, being circumstances which perhaps overlap to an extent with what have been recorded in certain preceding paragraphs, but given the complexity of the case in any event may be conveniently listed together below:

(i)                  CAO informed the applicants on at least 17 occasions that it did not require them to work due to inclement weather or machinery breakdown;

(ii)                CAO informed the applicants on six occasions to leave a pre-shift meeting because it wished to discuss an issue with permanent employees of CAO alone;

(iii)               CAO segregated permanent employees from contractors (inclusive of the applicants) in depicting crew shifts on mining rosters;

(iv)              CAO involved those contractor companies (inclusive of MES) in investigations it conducted into incidents (including some of the incidents having involved Mr Cumberland the subject of evidence in the proceedings);

(v)                CAO used a record of observation system, devised by those contractor companies (inclusive of MES) in order that they be informed of positive and negative incidents involving relevant employees introduced or supplied by them, being a system that was not put in place in relation to permanent employees of CAO;

(vi)              the applicants for instance were required to sign a contractor register book at the start and the end of each shift in the period of time from June 2001 to April 2002, being a procedure that did not apply to the so-called permanent employees of CAO;

(vii)             the applicants swiped a card through a computer reader and obtained a computer generated adhesive sticker at the start of each shift, being a system in place in the period from April 2002 onwards, which did not apply to those permanent employees of CAO;

(viii)           CAO used different forms to record times worked by those permanent employees on the one hand, and by its asserted contractors such as the applicants on the other;

(ix)              CAO gave preference to its permanent employees over contract labour (such as supplied by MES) in the allocation of overtime;

(x)                CAO supervised its contract labour to a greater extent than it did in relation to its permanent employees;

(xi)              CAO gave priority to consideration to permanent employees in relation to their requested times for taking of ‘leave’;

(xii)             CAO allocated contract labour in the first instance to the driving of trucks. 

I observe that those enumerated circumstances may of course have varying degrees of significance discretely to the principal issues arising in the proceedings, but at least cumulatively present as a formidable segment of submissions in support of CAO’s case. 

156               Whilst acknowledging that a balancing exercise was required, CAO submitted that the factors to which it has pointed as bearing upon what boils down to the critical issue arising as to the factor of control, support overwhelmingly the conclusion that CAO on the one hand and each of the applicants on the other were not engaged in an employment relationship.

CAO’s response to the applicants’ invocation of the authorities of Brook Street and Cable & Wireless – a detailed analysis of those authorities and their significance or otherwise in employment contexts such as here to the operation of the general law in Australia

157               I have taken the course of reviewing the United Kingdom Court of Appeal authorities of Brook Street and Cable & Wireless in some detail because of the extent to which the applicants sought to place reliance upon the approach and findings apparent in the respective reasons for judgment, in the case of Brook Street referrable to the reasoning of Mummery and Selby LJJ, and in the case of Cable & Wireless referrable to the approach taken generally in the joint judgment of all members of the Court of Appeal.  CAO’s submission was to the effect that the reasons in both decisions, other than that of Munby J in Brook Street, should not be accorded any effective, much less decisive, operation in relation at least to the relevant circumstances of the present case which CAO has outlined.  I will first address CAO’s submissions relating to Brook Street. 

158               CAO emphasised at the outset the obiter nature of what it sought to isolate as significant aspects of the reasoning of Mummery and Sedley LJJ in Brook Street to the effect that should the tripartite arrangements the subject of consideration in those proceedings appear in the future differently structured, it may be open to an employment tribunal to find that a respondent such as Mrs Dacas was an employee of the Brook Street labour hire agency pursuant to an implied contract of service (see [68] appearing within the reasons of the leading judgment of Mummery LJ).  CAO contended that obiter observations to any such effect should not be adopted by an Australian superior court.  Moreover CAO drew attention to what was said to have been acknowledged by Mummery LJ at [49]-[50] to the effect that the notion of a contract of service requires the existence of at least minimum obligations as to the provision of work, and conversely of obligations to perform that work in the context of control by the provider of the work.  CAO further emphasised in any event what was said by his Lordship at [49] concerning the need to eschew notions to the effect that ‘an individual is an employee simply because he is not a self employed person’, but contended that ‘[i]f there was no interposed employment agency there would be no doubt that, even in the absence of an express contract, Mrs Dacas worked under a contract of service with the council: it was managing and controlling work done by her in the mutual expectation that she would be paid for what she was told to do and had in fact done’, being a contention not at least directly relevant.

159               CAO drew attention to the purported characterisation of the so-called triangular arrangement appearing at [52]-[53] of the reasons of Mummery LJ.  I have already extracted earlier (at [85] in these reasons) much of what appears in [53]; in [51] his Lordship referred to the legitimacy of having regard to ‘the fact, if it be the case, that a series or a number of transactions are intended to operate in combination with one another or are ingredients of a wider transaction intended as a whole’.  That approach does not sit readily with the approach taken in the Australian authorities in relation to circumstances involving labour hire operators (such as in Forstaff).  CAO’s contentions were in summary to the effect that the analysis of Mummery LJ (and implicitly therefore also of Sedley LJ) fell ‘rather short’, in that the first issue normally required to be resolved in labour hire cases, such as Brook Street, is simply whether there existed a contract at all between the worker and the client of the labour hire agency, or else between the worker and the labour hire agency.  I was referred to Ermogenous and Teen Ranch, both of which involved an issue as to whether the parties mutually intended to enter into a contractual relationship, the element of intention in that regard being paramount.  The respective factual circumstances in those United Kingdom and Australian cases were some distance removed from the industrial context of the relationships involved in the present proceedings. 

160               CAO contended further in relation to Brook Street that neither Mummery LJ nor Sedley LJ ‘clearly and crisply asked and answered’ what CAO would contend to have been the critical issue, namely ‘did the Council and Mrs Dacas intend to enter upon legal relations’, before proceeding to consider the nature of any implied contract.  CAO contended that it could not be correct, and would be contrary to Australian authority, for a court to enter upon a consideration of the nature of an implied contract before first resolving the issue as to whether or not the parties in dispute intended to create or enter upon a legal relationship in the first place.  It was emphasised by CAO in that regard that merely the regular attendance by a person at the workplace of another person does not give rise to the implications of a contract between those persons, and moreover that his Lordship’s reasoning geared to the doctrine of implied contracts ‘impermissibly conflates the separate stages of contractual enquiry’.  There is in my opinion force in principle inherent in those CAO submissions as to shortfalls in any assistance to be derived from the leading judgments in Brook Street. 

161               The differing approach of Munby J, as the third member of the Court of Appeal in Brook Street,adopted at [83] what CAO described as a more conventional position in terms of authority.  His Lordship’s starting point was that ‘the mere fact that there is a contract between the worker and the agency, and another contract between the agency and the end-user, plainly does not prevent there also being a contract between the worker and the end-user.  Nor, of itself, does it prevent any contract between the worker and the end-user being a contract of service’.  That approach is more in line with Australian authority and also with the United Kingdom approach taken subsequently in Viasystems in relation to what was described in the concluding sentence of [80] by Rix LJ.  Where Munby J’s reasoning departed at least implicitly from the approach of the other members of the Court of Appeal was in his isolation at [83] of two critical elements of an employment relationship, namely ‘the obligation to remunerate and the right to control’.  Munby J cited authority stating that the ‘mutuality of obligation and the requirement of control on the part of the potential employer [are the] irreducible minimum for the existence of a contract of employment’.  His Lordship further cited authority to the effect that ‘[t]he significance of mutuality [is] that it determines whether there is a contract in existence at all’, and that ‘[t]he significance of control [is] that it determines whether, if there is a contract in place, it can properly be classified as a contract of service, rather than some other kind of contract’.  Moreover Munby J considered at [87] that ‘[t]he requirement that there be mutuality of obligation necessarily focuses attention on the obligations (if any) undertaken by the end-user’, which his Lordship described as not inclusive of any obligation ‘to provide the servant with work in addition to wages’, any such latter obligation being ‘not very often to be found expressed in written contracts of employment’.

162               The opinion of Munby J at [89] was therefore that ‘[i]f the obligation to remunerate the worker is imposed on the agency, there cannot be a contract of service between the worker and the end-user’, and conversely ‘if, at the same time, control is vested in the end-user, then there equally cannot be a contract of service between the worker and the agency’.  Those propositions were considered by his Lordship to reflect ‘a consistent line of authority holding that in [such] circumstances there is no contract of employment – indeed no contract at all – between the worker and the end-user’.  Moreover it is in line with Australian authority (for example Forstaff) to postulate the need for there to be a contract in operation between a putative employer and a putative employee in order to establish the relationship of employer and employee.  The extensive line of authority listed in [90] of his Lordship’s reasons bearing upon the propositions which he enunciated include Stephenson.  I would draw attention to the concluding sentence at [53] of the reasons for judgment in Stephenson, being that ‘[o]n any view it would, in our opinion, be unusual to describe an individual as having a contract of employment with a party who has no legal obligation to pay his wages and to whom he had no legal obligation to provide work’.  Further authority in England conceivably to like effect was nevertheless cited by Munby J at [90] of his reasons. 

163               As I foreshadowed, the submission of CAO on the implications of the authorities identified by Munby J was that his Lordship ‘… appears to have approached the case in a more conventional way’, and seemingly ‘to have included the question of “intention” in the mix of issues for considering what the facts actually proved – including whether or not there was a contract with anyone at all’.  There is in my opinion considerable force in that submission, in the light also of Drake Personnel and Forstaff more recently in Australia.  Whilst agreeing with Mummery and Sedley LJJ upon the outcome to the appeal, Munby J parted company with the thrust of what I think may be described as their Lordships’ obiter dicta, as Munby J at least implicitly indicated at [80]; indeed Munby J further expressed in [81] ‘very serious misgivings about the course on which [such dicta] would have us embark’.

164               It was accordingly submitted by CAO that the reasoning of Munby J in Brook Street constituted ‘a compelling demolition of the rather confusing approach by the majority [United Kingdom Court of Appeal] in that case’, and a ‘powerful cause for this Court not following that approach’.  After concluding his analysis of authority, Munby J drew together at [101]-[103] (which I have reproduced below) his reasons for disagreement with the majority in Brook Street which I have foreshadowed, and in so doing, formulated an approach which CAO asserted to be here applicable to the determination of the present proceedings:

‘[101]Where, with all respect, I part company with my Lords is in relation to three matters.  The first is the suggestion that the objective fact and degree of control over the work done by Mrs Dacas over the years is crucial.  That, as it seems to me, somewhat overstates the position.  And in any event it does not seem to me, with all respect, to meet the point made by Elias J in the Stephenson case.

[102]  The second is the suggestion that there is mutuality of obligation because the council was under an obligation to pay for the work that Mrs Dacas did for it and she received payment in respect of such work from Brook Street.  In this connection [Mummery LJ] asks rhetorically, What was the council paying for, if not the work done by Mrs Dacas under its direction and for its benefit?  The difficulty with this approach … is that the council had no obligation to pay Mrs Dacas, that Brook Street’s obligation to pay her arose independently of whether or not Brook Street was paid by the council, and that the Council did not set the rate of her pay.  It needs also to be borne in mind that the sum contractually payable by the council to Brook Street was not simply the aggregate of the sums payable by Brook Street to Mrs Dacas and her fellow workers.  It will also have included, in addition to Brook Street’s profit, an element reflecting the cost to Brook Street of meeting its various obligations to the council.

[103]  The contract between Brook Street and the council was for the provision of services in accordance with a detailed specification and various other contractual documents … The answer to my Lord’s rhetorical question … is that what the council was paying for was not the work done by Mrs Dacas and her fellow workers but the services supplied to it by Brook Street in accordance with the specification and the other contractual documents.  The monies paid by the council to Brook Street were not payments of wages, nor were they calculated by reference to the wages payable by Brook Street to Mrs Dacas and her fellow workers.  There was no mutuality.’

The rhetorical question above ‘… what was the council paying for…’ merits emphasis in particular in the light of what seems to me to be the prevailing authority at least in Australia to which I have referred, and would seek to follow. 

165               Hence CAO submitted that it may ‘clearly be seen’, by reference to the evidence placed before this Court, that the critical elements identified by Munby J as fundamental to his Lordship’s reasons for disagreement with the approach of the majority in Brook Street, and which were said by CAO to be fundamental to the resolution of the present issue arising according to the general law of Australia, require that this Court should find that there was no contract of employment made between CAO and each of the applicants.  CAO identified that evidence to be in summary to the following effect:

(i)                  there was no mutuality of obligation, CAO being under no obligation to make payment to either of Messrs Wilton or Cumberland for the work they respectively undertook at the HVO;

(ii)                instead the only obligation as to the payment of remuneration or other benefits to either of the applicants was an obligation which rested with MES and not CAO;

(iii)               moreover the obligation of MES to pay each of the applicants arose independently of whether or not MES had been or was to be paid by CAO for its supply of the applicants’ services;

(iv)              the rates of pay which applied to each of the applicants were not set by CAO but by an industrial instrument to which MES was a party and to which CAO was not;

(v)                the charges levied by MES upon CAO pursuant to their discrete contractual arrangements did not simply represent the aggregate of the sums payable by MES to each of the applicants (and for that matter to any other MES supplied workers for the time being), but included a profit element for the benefit of MES and the costs otherwise incurred by MES in meeting its obligations to CAO, in relation to which Mr Touzell testified in his affidavit of 6 June 2006, being for instance costs of ‘inducting’ those employees at the HVO, personal protective equipment, administration costs such as processing the pay for the employees to be supplied (including of course Messrs Wilton and Cumberland), and other associated and incidental employment costs such as payroll tax and workers compensation insurance in respect of those employees so supplied;

(vi)              the Supply Agreement entered into between CAO and MES for the provision of services by MES to CAO accorded with a detailed specification; and

(vii)             what CAO was paying, purportedly in relation to the supply of services to it by MES, was not just for the work done by each of the applicants per se,but for the services supplied by MES, in accordance with the relevant specification and other contractual documents.

In summary, so the CAO submission concluded, there was no mutuality of obligation between CAO and either of the applicants, and moreover there was no intention to create legal relationships between the CAO and either of the applicants; accordingly there was no contract at all between CAO and either of the applicants.

166               CAO further argued for completeness that ‘the possible position left open in Brook Street’,being that the worker (Mrs Dacas) was an employee of the ultimate client of the labour hire agency, was distinguishable from the circumstances the subject of the present proceedings, because unlike the position described in the reasons for judgment of Mummery LJ in Brook Street at [64]:

(i)                  the applicants and MES were undeniably in an employment relationship inter se; consistently with that, MES paid to the applicants their respective wages;

(ii)                the role of MES was not merely that of an agency finding suitable work assignments for each of the applicants;

(iii)               MES provided certain clothing and personal protective equipment for use by the applicants in their working assignments in the HVO;

(iv)              CAO did not view MES as performing the task merely of ‘staff supplier’ or ‘administrator of staff services’; and

(v)                CAO had its own individual instrument applicable to and governing its employment conditions, and what it was otherwise obliged to observe and undertake in relation to its own employees discretely from those of MES.

167               It was pointed out moreover by CAO that the United Kingdom Court of Appeal recognised in Brook Streetin any event the force of the submission that control exercised by the end user in Brook Street was the product of the contractual arrangements between the labour hire agency and that end user.  In that regard I was referred to [67] of the reasons for judgment of Mummery LJ, subsequent to which his Lordship acknowledged, at [68], at least the force of the arguments of Brook Street’s counselin attempted denial of the existence of any contract of service between that employment agency and Mrs Dacas.  Incidentally in [67], his Lordship observed also that ‘[i]f the case raised policy issues as to the working conditions of people in the position of Mrs Dacas, that was a matter for legislation by Parliament and not for the courts’. 

168               CAO drew further attention once more to the significance of the circumstance, that there was no contractual obligation imposed upon CAO to provide either of the applicants with work, and in that regard I was referred to Brook Street at [64].  CAO exemplified that circumstance by reference to the unavailability of work to the applicants, and hence of any requirement for them to report for work at the HVO, in the event of inclement weather or machinery breakdown, and further that it was open to CAO conversely to inform MES that it did not want a particular MES employee to work again at the mine for whatever reason (if any). 

169               I would next move to a consideration of the detailed attention afforded by the parties to Cable & Wireless, which I have earlier foreshadowed that I would do more extensively in the context of my recitation of CAO’s submissions than did the applicants, CAO having given perhaps more extensive attention to Cable & Wireless.  That case was decided by the United Kingdom Court of Appeal subsequently of course to Brook Street by a different bench being Sir Anthony Clarke MR and Smith and Kay LJJ.  The joint judgment of their Lordships at [35] expressed the opinion that ‘… the view of the majority in Dacas was correct’.  It was submitted by CAO nevertheless that the decision in Cable & Wireless was ‘not compelling’, in that the United Kingdom Court of Appeal once more did not address ‘the fundamental problem of intention to create legal relations as a threshold question’, or more precisely, to create a contractual relationship.  In that latter regard, it was submitted by CAO that the Court of Appeal’s reasoning in Cable & Wireless was ‘out of step with the law in Australia’, exemplifying in that regard Ermogenous and Teen Ranch, and in any event, that the decision in Cable & Wireless was of little relevance to the present case because of what was described as its vastly different factual circumstances.

170               The factual context to Cable & Wireless was different and more complex than in Brook Street, and needs to be explained in some detail in order to provide an adequate understanding of the nature and extent of the issue which there arose for resolution, and any conceivably comparable context to that involved in the present case.  The respondent Mr Muscat had been engaged as an employee of a telecommunications specialist with a company called Exodus Internet Ltd (‘EIL’), when the company decided to reduce the number of its employees in order to facilitate a potential buy-out, but which nevertheless wanted to retain that worker’s services.  EIL informed Mr Muscat that he would have to become a so-called contractor, and to provide his services through a limited company.  His employment was thereupon terminated and a company named E-Nuff Comms Ltd (‘E-Nuff’) was set up to receive his pay and car allowance.  About three months later, EIL was effectively taken over corporately by Cable & Wireless.  Mr Muscat was described by Cable & Wireless within the context of its organisational structure nevertheless as an employee, and he was given accordingly an employee number.  The cost of all of the equipment upon or with which he worked was paid by Cable & Wireless.  Mr Muscat continued to submit invoices for his services provided in the name of E-Nuff.  Since however Cable & Wireless considered Mr Muscat to have remained associated with it, though by then as a contractor, Cable & Wireless informed him that it would not deal with him directly, but that as in the case of all other contractors seeking to make arrangements for the provision of their services to Cable & Wireless, he would have to engage with Cable & Wireless through an agency entity called Abraxas plc, which had been retained to supply contracted personnel to Cable & Wireless.  On 13 August 2002, E-Nuff (at least implicitly at Mr Muscat’s direction) entered into a contract for services in favour of Abraxas, which included as a retrospective element the period of time up to when Mr Muscat became aware of the requirement for him to deal with Cable & Wireless per medium of Abraxas.  It was that contract for services which was described as crucial to the resolution of the Cable & Wireless proceedings, in that it was the case of Cable & Wireless that such contract for services changed the status of Mr Muscat from that of its employee.  Subsequently in late November 2002 Cable & Wireless informed Mr Muscat that it would no longer require his services and on 31 December 2002 he ceased work directly or indirectly (that is, purportedly per medium of E-Nuff and no longer by himself directly) for Cable & Wireless.  In March 2003 Mr Muscat made a claim for compensation upon Cable & Wireless for unfair dismissal.  Cable & Wireless contended in response that Mr Muscat was not its employee, but that contention was rejected, it being found that Mr Muscat held an implied contract of employment with Cable & Wireless.  The notion of implied contract of employment had been postulated by Mummery and Sedley LJJ in Brook Street. 

171               The unanimous judgment of the United Kingdom Court of Appeal in Cable & Wireless was acknowledged by CAO to have established, on the facts of that case, that the contention of Cable & Wireless that Mr Muscat was not its employee was not sufficiently compelling, in the light of the circumstances that:

(i)                  Mr Muscat had been told by Cable & Wireless, after having subsequently worked for it per medium of his company E-Nuff under what was accepted by the Court of Appeal to be an employment contract, that Cable & Wireless did not deal with contractors, and that he would therefore have to deal with it in the future through Abraxas;

(ii)                Mr Muscat was given no choice other than to deal with Cable & Wireless through Abraxas, or else submit to the termination of the relationship which had been more recently brought into existence, and to sue for the monies he was by then owed;

(iii)               Cable & Wireless was obliged to provide Mr Muscat with work and he in turn was obliged to attend the premises of Cable & Wireless and to do the work of a telecommunications specialist, subject to the direction and control of its management;

(iv)              Mr Muscat arranged with the Cable & Wireless management for the taking of his leave, and that company provided equipment to him and paid his telephone accounts; Cable & Wireless also provided him with an employee number; before the agreement with Abraxas was entered into, Cable & Wireless had been under an obligation to make payment to Mr Muscat, but that it had imposed the arrangements under which Mr Muscat became thereafter required to deal with Cable & Wireless per medium of Abraxas;

(v)                in relation to the formation of the Abraxas contract, the only change thereby effected was that Mr Muscat became ‘paid’ by Abraxas; otherwise there was no express or implied termination of the arrangement between Mr Muscat and Cable & Wireless.

172               CAO submitted that ‘[it] is obvious that the case presented by Cable & Wireless was unattractive and even contained elements essential to the company’s success but which were plainly unsupportable’.  CAO contended however that nothing said in Cable & Wireless would suggest the result in the present case that each of the applicants were CAO’s employees.  There was no factual similarity of relevance between the circumstances of the present litigants and those of the parties to the Cable & Wireless restructured relationships.  So much at least would seem to be correct, in that putting aside debate concerning the notion of implied contract of employment, the present circumstances did not involve any endeavour to restructure an existing employment relationship into a framework of labour hire which would no longer supposedly have the formal characteristics of any prior existing employment. 

173               The concluding observations of the United Kingdom Court of Appeal in Cable & Wireless at [54] may therefore be conceivably pertinent to the approach which the courts may take in Australia in circumstances involving an employer’s endeavour to alter an originally established relationship from that of a conventional contract of employment of a natural person to that of some form of principal and agent, such as was sought unsuccessfully to be achieved in Damevski (ante),but they have no sufficient connection to the circumstances of the present case, which involve no such alteration to the status quo of an employment relationship in favour of a natural person established in the conventional way, but rather the structure of genuine labour hire arrangements undertaken from the outset at arm’s length. 

Conclusions

174               Subsequent to the hearing of the oral evidence in the proceedings, which had taken place over four hearing days, the parties provided the following extensive written submissions:

(i)                  applicants’ written submissions in chief comprising 43 pages filed on 16 October 2006;

(ii)                CAO’s written submission in reply comprising 59 pages filed on 27 October 2006;

(iii)               applicants’ written submissions in reply comprising 10 pages albeit of compressed word processing filed on 3 November 2006.

The parties made oral submissions to the Court on 20 and 21 November 2006 though largely by way of amplification of the written submissions.

175               Each of the parties has provided to the Court extensive references to the evidentiary material placed before the Court and comprehensive written submissions supplemented by oral submissions.  Apart from material comprising common ground and recorded at the threshold of these reasons at [1]-[10], the parties have mutually agreed upon numerous matters contextual to the relationship and dealings between each of the applicants and MES and separately with CAO, and also between MES and CAO discretely, which matters have been recorded comprehensively at [11]-[19].  The formal circumstances additionally recorded at [20] and [22] were not in issue and were in any event duly established.  The relief sought by the applicants, and wholly put in issue of course by CAO, is set out at [21].

176               The parties are in agreement as to what may be described as the ultimate issue arising, that being whether each of the applicants on the one hand, and CAO on the other, were placed in an employment relationship inter se at the material times, which of course the applicants asserted CAO put in issue.  Relevant to and on CAO’s contention discretely critical to the resolution of that ultimate issue is whether each of the applicants was placed in a contractual relationship with CAO at any material time, which CAO further of course put in issue.  Apart from the existence of the so-called ‘Employment Undertaking’ signed by Mr Wilton and provided to MES as set out at [15] above, each being implicitly predicated upon the signatory being ‘placed for casual work on a [MES] client’s work site’, and upon documents not dissimilar in effect signed by Mr Cumberland and provided also to MES as set out at [19 (iii)] above, which documents reflected relevantly the records kept and maintained by MES, and did not apparently contradict any records maintained by CAO, a critical circumstance was that MES alone remunerated each of the applicants at the material times in relation to the provision of their labour to CAO, and did so in line with the apparent structure of so-called labour hire arrangements.

177               That MES and CAO were engaged together contractually by way of such labour hire arrangements was established formally by at least by the time of their entry into the comprehensive Supply Agreement in 2003, whereby persons retained by MES, such as the applicants, were placed by MES on labour hire with CAO.  The formation of that Supply Agreement took place against a background at least inferentially of prior labour hire arrangements existing between MES and CAO.  The applicants’ threshold or preliminary contention to the contrary, purportedly based on their commencement of work for CAO at the HVO prior to the formation of that Agreement, should be plainly rejected as untenable (see [10] above).  Prior to the taking effect of the Supply Agreement, the essence of the arrangement in operation between those two entities, apparently for some considerable time, was that each of the applicants was involved physically in the open cut mining undertaking conducted by CAO in the HVO under the auspices of labour supply arrangements in operation historically as between MES and CAO, whether on an ad hoc basis or more formally.  So much is readily apparent at least from the circumstances I have recorded for instance at [11] above, which, as I foreshadowed, became subsequently reduced to writing to the extent set out at [15] in the case of Mr Wilton and at [19 (iii)] in the case of Mr Cumberland.

178               Moreover those evolving circumstances of labour hire in relation to the applicants ultimately so recorded in writing were augmented by further arrangements subsequently put in place by MES, such as payment by MES of the applicants’ superannuation and taxation instalments out of their respective earnings derived from and paid by MES, and the absence of availability of work for the applicants at CAO’s Coal mining operations in the HVO, and hence of remuneration from MES, in times of inclement weather or machinery breakdown.  MES characterised each of the applicants in its records as engaged accordingly in casual or temporary employment.  CAO made payment accordingly to MES direct of the charges for labour hire raised and invoiced by MES to CAO in respect of each of the applicants, without any deduction therefrom for income tax or superannuation, and did so at rates calculated to cover not only all costs inclusive of salaries sustained by MES related to its employment of the applicants, but additionally to provide a profit element for MES in respect of the exercise of its business operations of labour hire.  Workers made available on hire by MES generally, such as the applicants, became thus available to CAO, and apparently to other mining employers engaged in Coal mining for instance in relation to mining companies operating in the Hunter Valley upon the basis of labour hire.

179               In a separate segment of these reasons for judgment, I sought to catalogue various matters regarding to those circumstances appertaining to the applicants, under the heading ‘Circumstances beyond the scope of evidentiary common ground – the operation of the mining equipment of CAO by the applicants and related matters’.  None of those labour hire circumstances created individually or cumulatively a relationship between either of the applicants of the one part and CAO of the other part which could be rightly described as one of employment by CAO of either of the applicants, being employment according to the general law.  The fact that each of the applicants undertook similar working duties and functions to many CAO directly retained and remunerated workers who were indisputably employees of CAO according to the general law, is not sufficient to indicate or require by any extent of analogy that the hired workers provided by MES to and thereby engaged by CAO should be relevantly characterised as employees of CAO.  Aside from the labour hire character of the arrangements the subject of the Supply Agreement made between CAO and MES, reflecting labour hire arrangements not dissimilar to those described by various authorities I have cited, and in particular the Australian authorities, it may be rightly borne in mind that there is nothing unusual or enigmatic in the circumstances such as appear to have prevailed in the HVO where CAO at all material times has conducted Coal mining operations, that persons the subject of labour hire might be engaged in working actively alongside or otherwise in association with undisputable employees of the business entity which has engaged contemporaneously other workers by way of labour hire from third parties such as MES. 

180               Nor does it make any difference of significance that by reason of statutory regulation of the physical conduct of segments of mining work by miners, and in particular Coal miners, any consequences should operate differently to what I have foreshadowed above to be the case.  As I have emphasised already, much of the regulation I have identified is directed at least to issues of safety in relation to persons engaged physically in mining work, whether as an operator of mining machinery or as a person who may otherwise be present in the precincts of any such operations.  It is apparent that safety concerns have been the reason for promulgation of many aspects of the regulations which I have either identified and/or additionally extracted, irrespective of the employment relationships inherently involved.  The circumstance that the applicants worked shoulder to shoulder with CAO acknowledged employees, being employees thus appearing on the CAO employment payroll, is thus of no present consequence. 

181               Significance was further sought by the applicants to be assigned to CAO’s management, and in particular as to management’s alleged discipline of each of the applicants, whereof evidence was adduced by the applicants, being management and discipline seemingly indistinguishable in principle, or at least largely so, from that in force for the time being in relation to CAO’s mining workers acknowledged to be in CAO’s employment.  I have outlined the evidentiary material relied upon by the applicants in that regard, and the asserted ascription on the part of the applicants of relevance thereto said to be a factor pointing to an employment relationship in relation to each of the applicants.  It is not foreign to or inconsistent with any such operational structure, whether as here involving mining with heavy machinery, or otherwise, that CAO took the purported disciplinary action that it did in relation to the alleged worksite misconduct on the part of Mr Cumberland complained of by CAO, given especially CAO’s evident perception, rightly or wrongly objectively speaking, of the physical danger thereby caused by his operation of CAO’s heavy machinery.  In that regard I have already acknowledged the force of CAO’s submissions.  I have earlier at least inferred that the applicants’ purported reliance upon The Queen v Foster needs to be discounted or else rejected in contexts of labour hire circumstances such as are here involved.

182               As to the controversial notion of implied relationships of employment and the significance thereof adopted by the two substantially concurring members of the United Kingdom Court of Appeal in the labour hire context of Brook Street, I would conclude, as I have foreshadowed earlier in these reasons, that there is no good reason for any imputation to the present circumstances of any such notion, assuming that notion to be rightly cognisable in the general law of Australia, to the extent and for the purpose indicated in the Brook Street context of labour hire arrangements, being an association which I think to be at best doubtful. 

183               It follows therefore, from what I have thus far concluded in relation to the applicants’ submissions, that there are doctrinal obstacles of significant judicial precedent cognisable by the general law of Australia which stand in the way of recognition of any entitlement to the grant of the relief sought in the present proceedings.  That is not to say of course that a contract of employment, whether oral or in writing, may not contain implied terms, and indeed such would I imagine normally or often be the case.  Where the difficulty largely lies, as exposed by the traditional approach taken by the third judgment in Brook Street, is in imputing any implied contract of employment in circumstances of labour hire, that being a transaction which inherently constitutes dual contractual arrangements, one being between the provider of the hired worker and the hired worker, and the other being between that provider of the hired worker and a third person who hires the second-mentioned person from the labour hire provider in order to obtain the performance of work from such hired person.  The implications relevantly of labour hire postulated in the reasons for judgment of Merkel J in Damevski at [174], as outlined in what is extracted in [34] above, are in my opinion apposite to the present context. 

184               Moving then to the submissions of CAO, outlined at [110] above, which put forward five reasons why a concluding inference is not open to be presently drawn as to satisfaction by the applicants of the existence of any contractual relationship between itself and each of the applicants.  I would conclude that each such reason so propounded by CAO has been duly established.  CAO is correct in its contention as to the absence of discussion, much less of agreement, whether oral or in writing, between CAO and either of the applicants, concerning remuneration or other essential conditions of employment.  Those CAO submissions were directed of course to the need for satisfaction by the applicants of requirement for the characterisation of an employment relationship having regard to an established contractual relationship (see again [24] above). 

185               To those circumstances may be added the four reasons set out in [117] above as demonstrative of and consistent with objective perceptions or intentions of each of the applicants as to an absence of his involvement in any contractual relationship with CAO consistently I think with the principle said to have been acknowledged in Australian Broadcasting Corporation.  Moreover the further circumstances concerning the applicants enumerated at [120] are I think indicative of and consistent with the absence of a contractual relationship of employer and employee at all material times as between each of the applicants as an employee of the one part and CAO as the employer of the other part.  Conversely, each of the matters enumerated in [122] and [123] above exemplify circumstances to the effect that CAO was privy to a contractual arrangement with MES for the supply to CAO of labour for reward to MES of persons (such as the applicants) engaged by MES to undertake mining work at the CAO mining operations conducted in the HVO, being work involving of course the operation by such persons of the mining machinery of CAO. 

186               I am further of the view that CAO is correct in its postulation that each of the matters enumerated at [124] above demonstrate not only a lack of sufficiently compelling indications capable of bearing upon the existence of an employment relationship between CAO and the applicants, but indeed serve to evince the converse.  Explanation is thereby implicitly provided as to why there was no requirement for CAO to enter upon, and moreover why it did not enter upon, any contract of employment with either of the applicants, and why CAO never recorded in any documentation the existence of any relationship of employment as between itself and either of the applicants.

187               I would therefore conclude that CAO is correct in its contention that in substance and reality, each of the applicants entered into a contractual relationship with and was employed by MES according to the general law at all material times, and that the applicants’ respective attendances at the HVO to perform mining work, albeit for the benefit of CAO as a major operator in the HVO, as well as in a commercial sense for MES in the context of its business of labour hire, did not constitute or involve explicitly or implicitly any offer of employment by CAO to either of them, nor any acceptance by either of them of any offer of employment by CAO, explicitly or implicitly. The work which each of the applicants undertook in the HVO was undertaken by way of labour hire in the context of their respective employment functions undertaken contractually for MES, and thereby as employees of MES alone according to law.  CAO’s citation of Swift Placements in that context of labour hire precedent was appropriate. 

188               Apart from an absence of evidentiary circumstances indicative explicitly or implicitly of any relationship according to law of the employment by CAO of either of the applicants at any material time, there are further factors and reasons which serve to demonstrate why the applicants’ case for establishment of any employment relationship between themselves and CAO should fail. 

189               There is force in the additional submissions of CAO, appearing under the heading ‘Mutual assent analysis’, contextually to a threshold acknowledgment of the principle that a viable contract of employment existing by mutual assent may be recognised by law in circumstances where the traditional analysis of offer and acceptance is inappropriate.  For the reasons advanced however by CAO, and appearing in [126]-[128] above, I agree that the kind of circumstances in which a contract has been imputed by judicial precedent to exist in contexts yielding a conclusion of mutual assent are removed from the circumstances in evidence in the present litigation. 

190               I further agree moreover with the contention of CAO that the fact that CAO exercised a measure of control over the activities of each of the applicants on the HVO sites of their respective physical engagements, to the extent relied upon by the applicants in their submissions, duly reflected the contractual arrangements prevailing between the applicants as employees and MES as employer that they would accept and obey the lawful and reasonable directions of CAO when given in the circumstances or kind of circumstances recorded in [130] above.  Any such arrangement would be expected to subsist in labour hire arrangements generally.

191               There remains for consideration the implications of the aspects of the conduct and functions of the respective parties undertaken in the context of what may be described as the totality of the relationship between the parties to this litigation and the working out thereof.  That notion has been substantially addressed already in these reasons, but it is necessary or appropriate to conclude additionally upon the evidentiary material addressed in the context of the invocation of authority undertaken by CAO in its comprehensive treatise reproduced by way of overview of the conduct and functions of the respective parties in the segment commencing at [132] of these reasons.  In so doing, I would keep in mind what was pointed out in Roy Morgan Research at 5074 (ante) as to ‘… obtaining the overall picture from the accumulation of detail’,and ‘the overall effect of the detail, which is not necessarily the same as the sum total of the individual details’. 

192               I think that CAO is correct in its comprehensive case advanced, in a sense in the alternative, to the effect that the conduct and functions of the respective parties were not otherwise indicative of an employment relationship between the applicants and CAO, having regard to the totality thereof, and having regard in particular also to the criteria apparent from the authorities to which I have already referred, inclusive in particular of Stevens, Hollis, Damevski, ACT Visiting Medical Officers and BHP Billiton, keeping in mind in so doing that it is labour hire arrangements that are here inherently involved.  I would acknowledge the relevance and force of all of the factors formulated in [135], each having varying significance without each being determinative in any fulfilment of the need for undertaking a balancing exercise in relation to all relevant factors bearing upon resolution of the principal issue arising as the existence or otherwise of relationships of employment.  I would further acknowledge the prospective operation, in cases such as the present, of the principles enunciated generally in Mason and Humberstone, as well as perhaps more specifically in Drake, and additionally of course in Forstaff where reference to and examination of authority is undertaken by way of focus on labour hire arrangements. 

193               Adopting the broad approach mandated by those authorities, which I have of course earlier recorded or reviewed to an extent, I am of the opinion that the submissions of CAO in its approach to the notions of control, direction, supervision and exercise of discipline in the context of approaching and evaluating relationships of relevance generally, and as reflected in the particular circumstances of the case, and yet further as comprehensively summarised by CAO in [142] of these reasons, are soundly conceived in principle and in its analysis and summary of the facts and circumstances relevantly the subject of the proceedings.  Moreover the further catalogue of circumstances propounded by CAO, and summarised in [144] above, demonstrate in outline the functions appropriate and necessary to be put in place in a labour hire context relating to Coal mining, and which do not necessarily operate of course wholly in the aggregate.  Those circumstances do not in my opinion impute the existence of any employer/employee relationship in the context of the labour hire operations appertaining to the circumstances relevantly of either of the applicants. 

194               Finally I would add that I am persuaded that the accumulation of the so-called ‘[o]ther factors’ formulated and propounded by CAO in the segment of these reasons appearing in [149]-[156] comprise, as I have there foreshadowed, a further formidable accumulation of evidentiary material supportive of the CAO case as to the absence of any employment relationship having subsisted at any material time between itself and either of the applicants.

195               For the foregoing reasons which I have summarised, and in the light of the totality of the matrix of facts and circumstances which the respective parties have invited me to address, I have reached the conclusion that CAO must succeed and that the application must therefore be dismissed. 

 

I certify that the preceding one hundred and ninety-five (195) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate:

Dated:         15 May 2007

Counsel for the Applicants:	S Crawshaw SC and A M Slevin
Solicitor for the Applicants:	Slater & Gordon
Counsel for the Respondent:	J N West QC and A B Gotting
Solicitor for the Respondent:	Freehills
Date of Hearing:	25, 26, 27, 28 September 2006 and 20 and 21 November 2006
Date of Judgment:	15 May 2007