Federal Court of Australia

Parker v HG Innovations Pty Ltd [2021] FCA 1051

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LOGAN J:

1    Whether a particular individual is or is not an employee is in many cases an uncontroversial given. But that is not always so, as the numerous authorities on the subject attest. Sometimes the facts of particular cases give rise to sharp differences of views as to the status of a particular individual.

2    In the joint judgment in the recently decided WorkPac Pty Ltd v Rossato [2021] HCA 23 (WorkPac v Rossato), at [103], it is observed that, “To say … that the resolution of the issue depends on ‘all the facts and circumstances’ is not to say anything very helpful at all.” That observation was directed to this statement by McTiernan J in Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 (Doyle), at 565:

Each case is to be determined on its own facts, consideration being given not only to “the nature of the work but also the way in which the wages are paid, or the amount of the wages, the period of time over which the employment extends, indeed all the facts and circumstances of the case.”

While McTiernan J did indeed point to a need to examine all the facts and circumstances of a given case, one factor which his Honour highlighted was “the way in which the wages are paid”. Although “wage” is a term usually associated with a payment to an employee for services rendered to an employer, if it is understood, as I infer McTiernan J intended it to be, as a reference to the type of payment that is made to an individual, his Honour’s statement was, in this regard and with respect, not just helpful but prescient. For, as will be seen, it anticipated a factor which in this century has come to assume quite some importance in resolving cases where whether an individual is an employee is controversial.

3    In August 2018, Mr Philip Parker (Mr Parker) instituted proceedings under the Fair Work Act 2009 (Cth) (FW Act) in the Federal Circuit Court of Australia (Federal Circuit Court) in which he alleged that, in May and June 2018 and as an employee of the first respondent, HG Innovations Pty Ltd (HG Innovations), or alternatively the second respondent, Alpha Financial Services Pty Ltd (Alpha Financial Services) or alternatively, the third respondent, Rideshare Solutions Pty Ltd (Rideshare Solutions), he had been subject to “adverse action”, namely, termination, because he had exercised workplace rights.

4    In the ordinary course of events, one might have expected the merits of Mr Parker’s claim, including any appeal by either party, long ago to have been determined to finality. Events have however, not taken a straightforward path. An application by the present respondents for summary judgement, always in the circumstances of this case an ambitious venture, nonetheless succeeded in the Federal Circuit Court. However, that outcome was overturned on an appeal by leave to this Court. Sometimes, it can greatly reduce delay by treating argument on a leave to appeal application as argument on a substantive appeal but that is not mandatory and it is not a course which commended itself either to the parties or the Court in this instance. Thus, Mr Parker first secured a grant of leave to appeal – Parker v HG Innovations Pty Ltd [2019] FCA 1291, and then, some 10 months later, succeeded in his appeal against the summary dismissal of his claim – Parker v HG Innovations Pty Ltd (No 2) [2020] FCA 906.

5    The case was returned for hearing to the Federal Circuit Court. There the case was promptly heard and determined, notwithstanding the impact of public health restrictions associated with the present pandemic, which required that it be heard via remote, audio-visual means. At this trial and as he has done at all stages of the proceedings, Mr Parker appeared on his own behalf, while the respondents were represented by counsel and solicitor.

6    On this occasion, the result was that Mr Parker’s claim was dismissed on the merits: Parker v HG Innovations Pty Ltd [2020] FCCA 3093. The reason why Mr Parker’s claim was dismissed was that the learned primary judge concluded that Mr Parker was not an employee. As the claim had been pleaded, that conclusion was fatal to its successful prosecution.

7    Mr Parker has now appealed against the order of dismissal.

8    Two of his grounds of appeal may be disposed of shortly.

9    Mr Parker alleged that the learned primary judge had erred in refusing to permit him to amend his claim so as to raise in the alternative that, even if he were an independent contractor, the termination nonetheless constituted adverse action in terms of item 3 in the meaning given to “adverse action” by s 342(1) of the FW Act. However, when one has regard to the transcript of the trial, Mr Parker did not, in the end, press any application for such an amendment. Instead, the trial proceeded on the basis originally pleaded in the claim, which was that Mr Parker was an employee. Read in isolation, one might be forgiven for thinking, as did Mr Parker but not the learned primary judge in his exchanges with him at trial, that an independent contractor could complain just as much as an employee in respect of adverse action constituted by termination. But the scope for complaint is limited by the definition of “workplace right” in s 341 of the FW Act. And the workplace right asserted by Mr Parker was one in relation to his alleged employment. He could only rely upon that to ground an adverse action claim alleging a contravention of the protection for which s 340 of the FW Act provides, based on that asserted workplace right, if he were an employee: see s 341(1)(c)(ii) of the FW Act. On the hearing of the appeal, I understood Mr Parker to accept that this was the correct characterisation of the events which had transpired at the commencement of the trial.

10    Mr Parker also alleged that the learned primary judge had erred by not applying s 361 of the FW Act so as to require the respondents to prove that he was not an employee. This, with respect, entails a misunderstanding of the operation of s 361 of the FW Act. An applicant in an adverse action proceeding must do more than just make allegations in a statement of claim. It is necessary for an applicant “first to establish the factual existence of the circumstance which is said to have been the reason for the taking of the adverse action”: Tattsbet Ltd v Morrow (2015) 233 FCR 46 (Tattsbet v Morrow), at [119], per Jessup J (Allsop CJ and White J agreeing).

11    As the present case was pleaded, Mr Parker at least had to prove that he was an employee, that adverse action, namely, termination, had been taken against him and that he had sought to exercise a workplace right. Having established these facts he would then have had the benefit of the presumption for which s 361 of the FW Act provided. The practical effect of that presumption was, as in most cases where threshold circumstances are established, that it became incumbent for the person or persons in practice responsible for the alleged adverse action to give evidence which persuaded the court, taking into account all of the evidence on that subject, including any led by an applicant, that this action was not for or did not include the prohibited reason alleged in the claim: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500. In this case, that person was the managing director of the respondents, Mr Michael Gleeson. However, the failure by Mr Parker to establish the threshold circumstance that he was an employee had the consequence that the presumption in s 361 was not engaged. In the result, the learned primary judge chose, in light of that, not to make findings as to what was the reason for the termination.

12    Once the true effect of s 361 of the FW Act is understood, it had no role to play in presuming Mr Parker to be an employee, as he had alleged. The ground based on that proposition must therefore fail.

13    This then leaves for consideration whether the learned primary judge erred in his conclusion that Mr Parker was not an employee.

14    The appeal to this Court is an appeal by way of rehearing. The task is to conduct a “real review” of the evidence led at trial and of the reasons of the primary judge. That means, as was stated by Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (2003) 214 CLR 118, at [25], that, “Appellate courts are not excused from the task of ‘weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect’” (footnote references omitted). In that case, their Honours referred with approval, at [25], to this statement of principle by Gibbs ACJ, Jacobs and Murphy JJ in Warren v Coombes (1979) 142 CLR 531, at 551:

[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.

15    The learned primary judge made very particular findings of fact adverse to Mr Parker in relation to various explanations which he gave in the course of his oral evidence as to his dealings with Mr Gleeson and why it was that he had never raised with him a query as to why pay as you go (PAYG) tax instalments were not being deducted from weekly payments made to him: see [42] – [56] of the reasons for judgment. While the primary judge enjoyed the advantage of observing Mr Parker and, for that matter, Mr Gleeson in the course of their oral evidence, it would be a misuse of that advantage if findings as to credibility or relative credibility were at odds with a position apparently revealed by contemporaneous documents not apparently created for any ulterior purpose. I do not consider that any of the credibility findings made by the primary judge had that quality.

16    As it happens, however, while, as highlighted below, some credibility findings have importance, in the main the characterisation of Mr Parker’s status depends on what is revealed on the face of and by necessary implication from the contemporaneous documents and on other evidence which was not controversial.

17    HG Innovations is a holding and operating company. The other two respondents are operating company subsidiaries. A business conducted by this group of companies is the hiring of motor vehicles to the owners and operators of “Uber” personal transport provider businesses. Within the group, Rideshare Solutions provides the hire vehicles while Alpha Financial Services provides finance to the Uber operator customers to enable the hiring. Mr Parker’s role was that of an intermediary, a “hire car broker” or a “finance broker and rental car broker” (terms used interchangeably by Mr Gleeson in his affidavit evidence).

18    Mr Parker’s engagement came about as a sequel to a conversation which occurred between Mr Gleeson and Mr Parker on or about 21 October 2017. That a conversation occurred between them at that time and was occasioned by an expression of interest by Mr Parker was not controversial. The sequel to that conversation was an exchange of emails in October 2017 between them. Unremarkably, this email exchange at the start of the engagement assumed a particular importance for the primary judge in characterising the nature of the engagement. I therefore reproduce the operative parts in full.

Mr Gleeson to Mr Parker on 21 October 2017

…

My thought would be to set up a contractor agreement like we do with other brokers on the standard package but with a twist around the Rideshare Solutions/Rentals business.

$1K a week

15% of finance deals you write from our leads

40 % of deals you find and settle yourself

$ figure for rent2own deals you get

$ figure for rental contracts on the road (or % of rental income)

other opportunities to be discussed.

I have potential opportunities from other dealerships that we can discuss for short term money if you need as well and I am about to open Southside MG at Moorooka next week as discussed and am launching a car brokerage from the Springwood site in the next period.

Mr Parker to Mr Gleeson on 23 October 2017:

…

I’m excited by the opportunity and challenge of innovation in this sector. I have a few ideas to run by you and think we can definitely grow rideshare solutions into a great profit centre.

I’m okay with the $1000 retainer, is this excluding GST?

When would you want to start? Would be great if I could see a contract and first pay this week if possible.

I did get interviewed on friday by Michael from West point and I think we hit it off. He was going to reference me and come back to me with an offer today.

Ideally as I need to earn some cash in the short term if I come on board with you, maybe you could offer me to locum for him occasionally as I think he is just short staffed for only a bit And this would substitute my commission short fall for a bit while we get rideshare solutions booming!

[sic]

19    On 24 October 2017, Mr Gleeson caused a copy of a standard form contractor agreement to be sent to Mr Parker. As sent, it contained the name of another individual in the personal particulars portion. As to this and as the primary judge recited, Mr Parker stated in his oral evidence that, because it had someone else’s name, he didn’t bother to open it, or read it, because he thought it was private. His Honour rejected this explanation. In part, that was based, as were all of his credibility findings, on his observations of Mr Parker’s demeanour when giving evidence. It was also because, “It was obvious the subject of the email was a standard contractor agreement and that Mr Gleeson, having given the terms of the agreement, was giving the Applicant the standard contractor agreement so that they could discuss at a later time”, at [7] of the reasons for judgment.

20    It was not controversial that, also on 24 October 2017, Mr Parker attended at premises at 1006 Ipswich Road, Moorooka from which the respondents operated. There, he was met by Mr Douglas Taylor, the general manager of Alpha Financial Services. Mr Taylor took him to a desk in the office area. Mr Parker brought his own laptop with him, which he used for work purposes throughout the period of his engagement. Mr Taylor ensured he had access to the respondents’ wi-fi network and to the office printer. He provided Mr Parker with stationery (which I infer bore the name of one or the other of the operating subsidiary respondents) and with procedures manuals for vehicle hiring and financing.

21    On 26 October 2017, Mr Parker sent an email to Mr Gleeson in which he stated that he was a sole trader under the name of Philip Parker and specified his Australian Business Number (ABN).

22    There is no reason to doubt, and the primary judge did not find, that these emails exchanged in October 2017 between Messrs Gleeson and Parker were anything other than what they appear to be, namely, a spontaneous sequel to their telephone conversation. In them, on the one hand, Mr Gleeson endeavoured to encapsulate the arrangement discussed and, on the other, Mr Parker signified his agreement to that arrangement.

23    Thereafter, as banking records put into evidence by Mr Parker demonstrate, he commenced receiving a weekly payment of $1,000. He also received, in response to particularised calculations made by him and sent by email to the respondents, percentage-based commission payments. A formal written agreement detailing the nature and terms of Mr Parker’s engagement and the entity by which he was engaged was never executed.

24    The evidence was that the weekly payment of $1,000 was made in gross. No deduction in respect of a PAYG instalment of income tax was ever made from it. Neither was there any such deduction from payments of commission. None of the respondents made any superannuation guarantee remittances in respect of Mr Parker. Nor was he ever included in any worker’s compensation cover maintained by any of the respondents.

25    The period of Mr Parker’s engagement fell within the 2017 to 2018 income year. If he prepared and lodged an income tax return for that income year, he did not tender it in evidence. If he prepared and lodged business activity statements in respect of periods that fell within that income year, once again he did not tender these. It was not therefore possible for the learned primary judge, nor is it for me, to gauge by reference to these how he chose to treat payments received from the respondents or whether he accounted for goods and services tax (GST) to the Commissioner of Taxation in respect of any of those payments.

26    The following evidence given by Mr Gleeson was, as to the sending, receipt and contents of the emails mentioned, also not controversial. It is desirable to detail their contents for the insight offered as to the basis upon which, after October 2017, Messrs Parker and Gleeson continued to deal with one another.

27    On or about 2 November 2017, Mr Gleeson received a text message from Mr Parker. One statement made by Mr Parker in that message was that he was no longer interested in being a rental car broker/contractor and that he was investing in the ride share space and would do his own thing.

28    On 16 November 2017, Mr Parker forwarded to Mr Gleeson a copy of an email he had received from Uber referring to a change in the terms of his agreement with that company from 1 December 2017. It was common ground that, throughout the period from October 2017 to June 2018, Mr Parker maintained an agreement with Uber pursuant to which he operated a personal transportation business. Mr Parker’s evidence was that the income he received from this was minimal. The primary judge did not, in terms, reject the evidence he gave as to the extent of time Mr Parker devoted to his Uber business. However, there may be an interrogative note sounded about this evidence by the general diffidence expressed by the primary judge in respect of his credibility.

29    On 17 November 2017, Mr Parker forwarded an email to a Ms Linda Williams, the administration manager at Westpoint Autos, into which Mr Gleeson was copied, referring to his business involvement with Uber drivers. Mr Gleeson took umbrage at this. Later that day, he caused an email to be sent to Mr Parker and copied to “various other staff members” (to adopt Mr Gleeson’s description in his affidavit evidence), advising them not to accept any further directions or requests from Mr Parker as he was overstepping his role as a broker/contractor, wasting staff time and causing more grief than good. Very shortly thereafter that day, Mr Parker sent an email to Mr Gleeson in which he apologised for his mistaken belief regarding his authority to request cars be registered and for appearing to be taking over the business. He also agreed in this email to remove the title “General Manager” of Rideshare Solutions from the signature block of his email stated that he would await a discussion with Mr Gleeson regarding his future “employment”. The evidence discloses that, prior to Mr Gleeson’s email on 17 November 2017, Mr Parker had commenced to adopt the title “General Manager” of Rideshare Solutions in the signature block of his email communications. He did later presume to recommence using the title “General Manager”.

30    On the early evening of 3 December 2017, Mr Gleeson sent an email to Mr Taylor enquiring whether he had received a contractor's agreement in the name of Mr Parker’s nominated legal entity. Later that evening, Mr. Taylor forwarded an email to Mr Gleeson and to Mr Parker advising there was no contractor's agreement yet in place and requesting Mr Parker to advise the name of the entity into which he wanted the contractor's agreement prepared and its ABN. Shortly thereafter that same evening, Mr Parker responded by email to Messrs Gleeson and Taylor, advising he would operate as a sole trader until 30 June 2018 and enquiring whether it would be difficult for him to switch to a company or trust at a later time.

31    On 22 February 2018, Mr Parker sent an email to Mr Gleeson in which he stated that he was intending to transition to a partnership ABN for tax purposes.

32    On 26 April 2018, Mr Gleeson received an email from Mr Parker advising that he wanted the current arrangement to continue, as he controlled the work he performed and had other business ventures. In the course of his oral evidence, Mr Parker stated that the statements which he made in this email were lies but he knew that, by making these statements, he would keep his position safe. The primary judge did not accept this (see, [51] of the reasons for judgment). Not only did his Honour consider the answer nonsensical but he also regarded it as at odds with this exchange which had occurred in the course of Mr Gleeson’s cross-examination by Mr Parker which was not contradicted. As to not contradicted, I understood his Honour to mean that it had not been the subject of any evidence in reply by Mr Parker. Mr Parker had asked, “It is true, isn’t it, that I only ever rented out HG vehicles?” to which Mr Gleeson answered, “No, you also rented out your own Jaguar.” Other evidence established that Mr Parker owned a Jaguar motor vehicle. I agree with his Honour that the renting out of Mr Parker’s Jaguar would constitute another business venture by him. An odd feature of this email of 26 April 2018 is that Mr Parker has again assumed the use of the title, “General Manager”, Rideshare Rental Solutions.

33    The evidence also included a number of emails that were exchanged between Messrs Parker and Gleeson on 30 and 31 May 2018. At that time, Mr Parker was in a personal relationship with a Monika (spelled “Monica” in some email correspondence) Kazimierska. Also at that time, Ms Kazimierska was assisting Mr Parker in dealings with customers from Uber. Some of the content of the email exchange on 31 May is directed to the subject of Ms Kazimierska’s status with the respondents and her entitlements.

34    On the morning of 30 May 2018, Mr Gleeson made this inquiry of Mr Parker (copied to Ms Kazimierska and apparently also intended to be but not in fact copied to a “Michelle”, the latter seemingly undertaking a personnel administrative role of some sort for one or the other or each of the respondents):

Just sorting pays for last week

When did Peter work and what do I need to pay ?

and when is Monika back to work and what did she work last week ?

Michelle – can get the new job descriptions confirmed and signed off so we give Monica and Phil clear guidelines of her job roles in the centralised admin team so we get rid of any confusion

[sic]

The reference to “Peter” is to another person who had been assisting Mr Parker with his duties.

35    Less than an hour later, Mr Parker made this reply by email to Mr Gleeson:

In case your busy and need a quick email points on top but explanation below.

- Monika – Full week pay

- Peter – No Pay

- Monika needs to come back to Rentals or ill get crushed.

Monika is back tomorrow however she was expecting to be paid a full weeks wage. She has still been doing tasks from home and has even stopped in a couple times to sort a couple fines that needed Stat declaring. My Apologies I should have confirmed this with you before she went on holidays. We have never done written contracts perhaps we should formalise it in the next week so we have a ridged system and your covered come June.

In regards to Peter we don't owe him anything and he knows this. No further pay will be required.

Unfortunately he has had a family tragedy but he won’t elaborate and isn't able to confirm when he can come back so I have explained I may need to replace him and may not be able to bring him back on board, so it's a good clean break off.

In regards to Monika and the admin role I thought we had discussed yesterday I would need her back up here doing all the operational stuff for me while I fend off customers. We are receiving 20 – 30 enquires per day which was consuming peters day and now will consume mine. This enquiry is actually compounding as they are calling back in the hope we have more cars. I won’t survive without Monika back in her office and hitting the Phone and getting the cars ready for me from a system and QT perspective.

She is the reason we don't have 2 many bad debts as she Audits and Manages all of the drivers payments.

I won’t be able to train a trainee any time soon and I will collapse if Monika isn’t back up here Thursday Morning.

[sic]

I infer that “QT” is a reference to Queensland Transport.

36    About 10 minutes later, Mr Gleeson responded to Mr Parker in these terms:

OK

ill Call you when free to discuss

Monica is on contract and yes I agree she needs a contract if she is to stay for clarity. As you know a contractor does not normally get paid for hours not at work but this a prime example of why we need clarity as it has grown from 1 day a week etc

She does a good job so I don't want to disincentive anyone but a contractor should not be under the impression they get paid when they do not work

happy for her to assist Rideshare rentals - but as discussed yesterday I want centralised accounts so we streamline process as whilst we have done well to survive to now we need stability in what we do so we can build further and control accounting/ admin /stock/ functionality.

She actually does a top notch job but your last comment week ago was you didn't need the resource and it would be good to seperate away from you/ personal etc.

You are a hard man to follow - hence I MUST build a system for the business that is SET

We need to get a plan and stick to it so we take the frustration out of everyones life and get the “group” working most efficiently. As you know I am open to discussion but we need a plan and stability now.

[sic]

37    On the morning of the following day, Mr Parker sent this response to Mr Gleeson, still under the subject heading, “RE: Monica”:

Monika has said that you have only paid her $400 can you please correct this to the $1,000 as I promised this to her.

I am arranging for a singular ABN for our written contract for you so this will mean you can claim GST. It will actually work out to be $47,272.73 EXC GST per year or $52,000 including for you and ill ensure to back invoice you for everything before EOFY.

Once again we definitely need to sit down and nut out the small details on paper.

Any news on the card issue we cant print or scan without toner as the machine locks up.

[Emphasis added – sic]

I infer that “EOFY” is “end of financial year”.

38    Late in the afternoon of that same day, 31 May 2018, Mr Parker sent an email to Mr Gleeson in which he summarised the number of telephone calls, and inquiries either by email, text or “walk in” with which he had had to deal that day and stated:

Problem: Well it’s a good problem to have however as Monika has been given 40 fines to stat declare and they are all time sensitive so that leaves me alone to prepare the rego requests and Booked hire license transfers load the cars to RCM, key tag and store books and spares and then rent them. So even though I have 8 camrys here I’ve only managed to register 4 and will have to wait till the phone stops to get the rest of the paperwork done.

I understand everyone is busy but if you have any ideas to help me out other than pulling a 14 hour day that would be great.

If you are wondering why we are busy many of the large providers are struggling to handle the new laws so they are down sizing or just not answering the phone. Keyz have also started to run out of cars.

Should I increase prices?

[sic]

39    In the email exchange of 30 and 31 May 2018 was said to be an exercise of a workplace right by Mr Parker to make a complaint to an employer in relation to being required to work excessive hours.

40    On 1 June 2018, Mr Gleeson sent this response to Mr Parker (copied to Mr Taylor) under the subject heading, “Re: Enquiry assistance”:

Sounds like a job to me ...... .

If too hard – let’s just shut the gate and close up

I’ll sort out next week

I’m easy but sick of the whinging for 79 rental cars

Let’s do a handover this arvo with you and Monika and we’ll move on

Divert phones to my mobile and we'll do what we did for the first 2 years

[sic]

41    It was common ground that this email of 1 June 2018 from Mr Gleeson brought Mr Parker’s engagement, whatever its character may have been and with whatever entity he had been engaged, to an end. Thereafter that day, Mr Parker submitted by email to Mr Gleeson a calculation of the amount he claimed was owed to him, $5,702.15. This was based on a gross weekly payment of $1,000 and percentage commission on business written in May 2018. This was promptly paid in full and without question later that day by Rideshare Solutions on Mr Gleeson’s initiative.

42    Also in evidence was a bundle of some 30 emails (Ex. PP15 to Mr Parker’s affidavit) authored by Mr Gleeson to which Mr Parker was an addressee sent between 1 November 2017 and 25 May 2018. Mr Parker’s submission both at trial and on appeal was that, considered collectively, these exhibited such a degree of control by Mr Gleeson over his activities that he should be characterised as an employee.

43    Yet another document in evidence was an Excel spreadsheet (part of Ex. PP17 to Mr Parker’s affidavit) which lists various individuals by given name under the field “staff”, notably including Mr Gleeson as “Managing Director”, Mr Parker as “Rideshare Rentals Manager” and Ms Kazimierska as “Rideshare Admin” and specifying related duties in a summary way. The spreadsheet was an annexure to an email authored by Mr Gleeson on 4 March 2018 and circulated to all individuals working within the corporate group. Mr Parker’s submission, both at trial and on appeal, was that this document indicated his integration into the organisation of the group and was indicative of his status as an employee. The response made to this on behalf of the respondents was that this spreadsheet was nothing more than a proposal, never implemented.

44    The learned primary judge, who delivered his reasons for judgment ex tempore on the same day as the evidence heard at trial, did not, in terms, refer either to the bundle of 30 emails or to the spreadsheet. In characterising Mr Parker as an independent contractor, rather than an employee, his Honour stated, at [57] of the reasons for judgment:

[When] looking at all of these circumstances, namely, the Applicant never asking about his tax, never asking for his superannuation, giving the ABN and talking about GST, all really do betray that he was quite content that the arrangement between he and the Respondent was one of a contractor and contractee, not employer and employee.

[sic]

45    As can be seen, the essence of why the learned primary judge concluded that Mr Parker was not an employee was that Mr Parker and, on behalf of an unidentified one of the respondents, Mr Gleeson, had made and adhered to a bargain under which none of the income taxation or superannuation guarantee consequences of an employment relationship would be applicable and to which a GST consequence of the supply by Mr Parker of services as a finance broker would be applicable.

46    Mr Parker devoted quite some attention in his notice of appeal and related submissions to putting forward findings of fact which he asserted that the primary judge ought to have made in his favour. These, as was put on behalf of the respondents, were premised upon an acceptance by the primary judge of Mr Parker’s evidence which, insofar as findings depended upon credibility had been comprehensively rejected by the primary judge. It is not necessary to address in detail this aspect of Mr Parker’s submissions. That is because the critical facts are revealed by the emails detailed above. That these were sent or, as the case may be received, was never controversial. What was always controversial, and remains so, was how to characterise what they revealed. Insofar as explanations attended these emails but in particular that sent by Mr Parker on 26 April 2018, the primary judge made a finding as to credit which he was entitled to make.

47    As to characterisation, Mr Parker, who made well-researched, pertinent written and oral submissions, focussed on what he submitted was the control and organisational integration exhibited by the contemporaneous emails to the end that the conclusion which should be reached was that he was engaged as, and always remained, an employee. He drew attention to the fact that, between Christmas 2017 and New Year’s Day 2018, he had taken leave but nonetheless received a weekly payment of $1,000 in respect of that week. This continuance of payment, even though not rendering service that week, supported a conclusion, he submitted, that he was an employee.

48    Mr Parker also submitted, with quite some justification when one looks to the various emails exchanged between Mr Gleeson and him, that attention was never given to which of the respondents was the employer entity. He highlighted that the maker of the final payment, Rideshare Solutions was, by June 2018, the entity via which Mr Gleeson caused payments to him to be made. I understood this to be a submission that, at least by then, the most likely employer entity was Rideshare Solutions.

49    The essence of the submissions made on behalf of the respondents was that, although compressed, in circumstances where there was such a mutually studied absence of formality by both Mr Gleeson and Mr Parker, the taxation discrimen adopted by the primary judge, taken in conjunction with the references in emails to contractor and the apparent co-existence of other businesses operated by Mr Parker, supported the primary judge’s conclusion. Insofar as the 30 email bundle showed that Mr Gleeson gave directives, these, it was submitted, were policy directives rather than prescriptive of how Mr Parker was to undertake his role as a broker. It was put that Mr Parker was free to undertake that role as he chose and to work such hours as he chose to deliver results. These features, it was submitted, were also indicative of his being an independent contractor. As to the spreadsheet, it was put that this was never more than a proposal. The accuracy of the latter submission was borne out by the covering email, in which Mr Gleeson makes this statement, “We are not 100% there yet and we will keep tweeking till we get right but thought it relevant to share what we have done so far.” It was further put that it was quite possible to have a business within a business.

50    In WorkPac v Rossato, at [97], of the joint judgment, it is stated that, “The character of the relationship between the parties is established by the rights and obligations which constitute the relationship.” But this statement is immediately followed by this qualification, “Nevertheless, use by the parties in their contract of the label “casual” might be a factor which influences the interpretation of their rights and obligations.” The same may be said of a label such as “contactor”. The judicial task is first to identify the rights and obligations which attend the relationship between the parties and then to characterise the relationship on the basis of these, not to substitute on self-perceived policy grounds an alternative relationship to that chosen by the parties. The joint judgment in WorkPac v Rossato, at [62], contains this reminder:

62    To insist upon binding contractual promises as reliable indicators of the true character of the employment relationship is to recognise that it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord out of industrial differences. That it is no part of the judicial function to reshape or recast a contractual relationship in order to reflect a quasi-legislative judgment as to the just settlement of an industrial dispute has been emphatically the case in Australia at the federal level since the Boilermakers Case.

[Footnote references omitted]

51    The exchange of emails between Messrs Gleeson and Parker in October 2017 and thereafter is noteworthy for the high degree of mutual informality which attended the formation of a relationship between Mr Parker and one or the other of the respondents and the continuance of that relationship. This informality obviously suited each of them.

52    At the outset and looking at his email of 21 October 2017, Mr Gleeson was keen to have Mr Parker commence work. Looking at his email response of 23 October 2017, Mr Parker was keen to commence work and equally keen to commence receiving payment for that work. Their email exchanges reveal that, both at the outset and throughout the period of Mr Parker’s engagement, Messrs Parker and Gleeson always dealt with one another on the basis that Mr Parker was a contractor. Sometimes it was contemplated that the relationship might evolve such that Mr Parker’s service was provided via a service company or a partnership, although neither came to pass. Only after the engagement came to an end and then only by Mr Parker was it ever asserted that Mr Parker was always an employee.

53    Such informality of dealing is by no means unusual, especially in small business. Looking at the contemporary emails, Mr Gleeson and Mr Parker were each busy men, focussed on end results and related financial rewards rather than the formality of a written contract.

54    Against the background of a need first to identify the legal rights and obligations, all of this brings to mind these observations made by Allsop J (as his Honour then was), with the agreement of Drummond and Mansfield JJ, in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 (Branir v Owston Nominees), at [369]:

… [A] number of authorities discuss the need not to constrict one’s thinking in the formation of contract to mechanical notions of offer and acceptance. Contracts often, and perhaps generally do, arise in that way. They can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting i’s and crossing t’s or where they think they have done so. Here, the i’s were not dotted and the t’s were not crossed because of Mr Graham’s conduct. Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: ‘‘and we hereby agree to be bound’’ in this or that respect. The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract. The authority for the above can be found in, at least, the following: Meates v Attorney-General [1983] NZLR 308 at 377 per Cooke J (as his Lordship then was); Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118 per McHugh JA (Hope and Mahoney JJA concurring); Vroon BV v Foster’s Brewing Group [1994] 2 VR 32 at 81-83 per Ormiston J (as his Honour then was); Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 555 per McHugh JA (with whom Samuels JA concurred); Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601 at 611 per Bingham J (as his Lordship then was) affirmed on appeal at 615; Pobjie Agencies v Vinidex Tubemakers [2000] NSWCA 105 at [22]-[24] per Mason P (with whom Meagher and Handley JJA concurred); Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 at [74]-[80] per Heydon JA; though see Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 per Tadgell J (as his Honour then was); and in this context see also Electrical Enterprises Retail Pty Ltd v Rodgers (1988) 15 NS LR 473 at 489 per Kearney J and Manzi v Smith (1975) 132 CLR 671 at 674.

55    Here, too, Mr Parker and Mr Gleeson never got around to dotting the i’s and crossing the t’s. But their mutual assent and the terms of that assent were made manifest by their dealings after their email exchange in October 2017. Mr Parker was to deploy his expertise as a broker for the benefit of the respondents. He was to do so as a contractor, not as an employee. For this he was to receive a weekly retainer of $1,000 plus a percentage of the business he garnered in. In keeping with the results focussed aspect of the initial dealings between Messrs Parker and Gleeson, there was no delineation of standard working hours for Mr Parker. Inferentially, the mutual expectation was that Mr Parker would set his own hours so as to achieve results and “grow the business”, and thereby gain related reward as a broker. Read as a whole, the email exchanges also disclose that, from the inception of Mr Parker’s engagement, there was never a mutual expectation that he was obliged to devote all of his time to the interests of the respondents.

56    That the understanding was the supply by Mr Parker of the brokerage service would attract GST is indicated not just by the interrogative note in Mr Parker’s email of 23 October 2017 but rather by inference from the apparent answering of that note that the weekly retainer was GST inclusive as evident from his email of 31 May 2017 on the subject, “RE: Monica” to Mr Gleeson: “I am arranging for a singular ABN for our written contract for you so this will mean you can claim GST. It will actually work out to be $47,272.73 EXC GST per year or $52,000 including for you and ill ensure to back invoice you for everything before EOFY.” Inferentially, the arrangement described accorded with what long before then was mutually understood to be the arrangement that attended the weekly retainer paid to Mr Parker since October 2017. The emails in evidence are noteworthy for the absence in them, before June 2018 of any suggestion that the weekly retainer was anything other than GST inclusive.

57    The percentage used in Mr Parker’s email of 1 June 2018 to calculate the commission amount owed to him for business written in May 2018 and its payment without demur indicates that he and Mr Gleeson had long before settled upon that percentage.

58    Approaching this case on the basis indicated in Branir v Owston Nominees, there is no doubt that a contract was formed. The parties to that contract were Mr Parker and, more likely than not, as indicated by the source of payments to Mr Parker, Rideshare Solutions. The contract was formed no later than 23 October 2017 and terminated on 1 June 2018. The essential rights and obligations created by that contract were:

(a)    Mr Parker would deploy his expertise as a broker for the benefit of Rideshare Solutions and, directly or indirectly, the other respondents.

(b)    In return, Mr Parker would receive:

(i)    a weekly retainer of $1,000, paid in gross; and

(ii)    each month and in arrears, a percentage of the value of business he had brought in for the preceding month.

(c)    The weekly retainer would be paid on the basis that it was GST inclusive and, related to that, that neither PAYG deductions would be made from it nor would there be any superannuation entitlement.

(d)    Mr Parker would supply his own computer.

(e)    Mr Parker would be provided with office space, wi-fi and printer access and the use of group letterhead, forms and other stationery.

(f)    There were no standard working hours.

(g)    Mr Parker was not obliged to devote himself exclusively to the businesses of the respondents.

59    The “label” which the parties put and continued consistently to put on the contract so formed with these rights and obligations was that Mr Parker was a “contractor” in the sense of an independent contractor, not an employee.

60    As an initial observation, the label assigned to the contract by its parties is not inconsistent with the rights and obligations created by it.

61    As already mentioned, Mr Parker emphasised in his submissions control and business integration as factors which supported the true characterisation of the relationship as that of employer and employee.

62    There is no doubt that control has historically been, and remains, a factor, sometimes a decisive factor, in the characterisation of a relationship as that of employer and employee. These days, it is the lawful ability to exercise, rather than the actual exercise of, control over the activities an individual which can be a sufficient discrimen. But, at most, it is but one of a number of factors for consideration in a multi-factorial analysis of a relationship and no substitute for identifying the contract made between the parties and the rights and obligations created under that contract.

63    That control is not, as it was once thought, determinative is made apparent in one of the cases to which Mr Parker aptly referred, Hollis v Vabu Pty Ltd (2001) 207 CLR 21, (Hollis v Vabu) at [43] – [44], per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ:

43.     … In Stevens v Brodribb Sawmilling Co Pty Ltd, the Court was adjusting the notion of “control” to circumstances of contemporary life and, in doing so, continued the developments in Zuijs v Wirth Brothers Pty Ltd and Humberstone v Northern Timber Mills. In Humberstone, Dixon J observed that the regulation of industrial conditions and other statutes had made more difficult of application the classic test, whether the contract placed the supposed employee subject to the command of the employer. Moreover, as has been pointed out:

“The control test was the product of a predominantly agricultural society. It was first devised in an age untroubled by the complexities of a modem industrial society placing its accent on the division of functions and extreme specialisation. At the time when the courts first formulated the distinction between employees and independent contractors by reference to the test of control, an employer could be expected to know as much about the job as his employee. Moreover, the employer would usually work with the employee and the test of control and supervision was then a real one to distinguish between the employee and the independent contractor. With the invention and growth of the limited liability company and the great advances of science and technology, the conditions which gave rise to the control test largely disappeared. Moreover, with the advent into industry of professional men and other occupations performing services which by their nature could not be subject to supervision, the distinction between employees and independent contractors often seemed a vague one.”

44.    It was against that background that in Brodribb Mason J said that, whilst these criticisms might readily be acknowledged:

“the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, ‘so far as there is scope for it’, even if it be ‘only in incidental or collateral matters’: Zuijs v Wirth Brothers Pty Ltd. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered."

[Footnote references omitted]

64    A right to exercise control did not feature in the exchanges between Messrs Parker and Gleeson in October 2017. However, the emails in evidence, including the bundle of 30 emails tendered by Mr Parker, certainly show that Mr Gleeson presumed to exercise control over the affairs of the group of companies comprising the respondents. And he did so in no uncertain terms, witness his upbraiding Mr Parker for presuming the title, “General Manager” or presuming to direct other staff. Mr Parker’s responses indicate that he accepted that Mr Gleeson had a right to give such directions. Mr Gleeson was a very “hands on” managing director. Yet he was concerned with results, leaving, within the limits of his assigned remit, the detail of how Mr Parker brought in clientele for the two operating companies to him. Once clients were brought in, there were certain procedures which had to be followed, as laid down in manuals.

65    It was once thought that a distinguishing feature between a relationship of employer and employee on the one hand and principal and independent contractor on the other was that an independent contractor carried out his own work not as a representative (as would an employee) but rather as a principal in his own right or, put another way but to no different effect, that an employee is a person who serves his employer in his, the employer’s business, whereas an independent contractor is a person who carries on a trade or business of his own: Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia (1931) 46 CLR 41, at 48 (CML Case); Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 (Marshall v Whittaker’s Building Supply), at 217 – 218.

66    Related to this was the notion, notably expressed by Denning LJ (as his Lordship then was) in Bank voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248, at 295, that organisational integration was decisive, “In this connexion I would observe that the test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organization”. Yet the notion that “organisational integration” was decisive was not favoured in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, at 26 – 27.

67    In On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 214 FCR 82, at [207], another case to which Mr Parker referred, Bromberg J expressed the view that this distinguishing feature had been regarded in Hollis v Vabu as a “focal point” for a multi-factorial approach. However, and with respect, while it was given prominence in the CML Case and in Marshall v Whittaker’s Building Supply, when these were considered in Hollis v Vabu, at [40], it was stated that, “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”. The benefiting of the business of an independent contractor may be achieved by the benefiting of the business of that contractor’s principal. Further, as in the later decided WorkPac v Rossato but not as in Hollis v Vabu, the present case is wholly concerned with the character of a relationship, “a question the resolution of which has no significance for the rights of persons who are not privy to the relationship”: WorkPac v Rossato, at [101]. The “focal point” in Hollis v Vabu was whether Vabu was vicariously liable for an injury inflicted on a third party by a bicycle courier wearing its livery. The “focal point” in the present is the contract between the parties and the rights and obligations created thereunder. The “totality of the relationship” is not a proxy or substitute for such a focus.

68    Hollis v Vabu is also noteworthy for the allowance, at [47], that, in the overall circumstances of other cases, factors such as a significant investment in capital equipment or the greater skill and training of the individual concerned might tell in favour of the characterisation of that individual as an independent contractor rather than as an employee. In Hollis v Vabu, where there was a written contract, which was expressed to be a contract for service, the investment of capital by the individual, a bicycle, was modest, as were the related operating expenses and the skill required to operate the bicycle. Indeed, the relative insignificance of the cycle courier’s capital investment was a distinguishing feature (see Hollis v Vabu, at [22] and [47]) between that case and an earlier case involving other couriers engaged by that same company the facts of which were materially identical, save that these couriers investment of capital was greater, taking the form of either a motor vehicle or a motorcycle: Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537. In that case, the New South Wales Court of Appeal had concluded that the relationship between the company and those courtiers was that of principal and independent contractor. Considered alone, it might be said that the contribution of a computer by Mr Parker, necessary though it was, entailed a quite modest capital investment on his part but that contribution was agreed and it was an essential one. Further, the making of that contribution is not inconsistent with how, from the inception and for its duration, Mr Parker on the one hand and, on behalf of Rideshare Solutions or, as the case may be, the other respondents, Mr Gleeson chose to term the relationship formed in October 2017.

69    In the present case, Mr Parker was not a member of a learned profession or a highly qualified tradesman. Nonetheless, it was his skill and experience as a broker that saw him engaged to, and he did undertake, that role. Once again, the deployment of that skill and experience is neutral as to the character of the relationship.

70    I turn then to the significance of the taxation arrangements agreed between Mr Parker and Mr Gleeson in October 2017 and adhered to throughout Mr Parker’s engagement. In this Court, seemingly differing views have been expressed as to that significance as a discrimen for characterisation whether an individual is an independent contractor or employee.

71    In ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146, at [37], Buchanan J, with whom Lander and Robertson agreed, stated:

It is also difficult, in my view, to give much independent weight to arrangements about taxation, or even matters such as insurance cover or superannuation. These are reflections of a view by one party (or both) that the relationship is, or is not, one of employment. For that reason, in my view, those matters are in the same category as declarations by the parties in their contract (from which they often proceed). They may be taken into account but are not conclusive. These matters are less important than the adoption by the parties (where this occurs) of rights and obligations which are fundamentally inconsistent with basic requirements of a contract of employment, such as the ability to delegate the discharge of obligations under a contract to another person, or where there is a lack of control over how work is done.

72    In a later case, also heard in the Full Court, Tattsbet v Morrow, at [70], Jessup J, with whom Allsop CJ and White J agreed, stated:

… in contemporary Australia, it is impossible to ignore, and difficult to depreciate, the taxation implications of the mode of operation which parties to a relationship have voluntarily adopted. In the past, the deduction of what are now called PAYG instalments was always treated, uncontroversially, as indicative of an intention that the relationship in question was one of employment. To any suggestion that the absence of such instalments tended to point to the relationship being one of principal and independent contractor, it was often rejoined that such an argument was circular, in the sense that a consequence of the relationship being one of employment was, under legislation, that such instalments had to be deducted. In contemporary times, however, there are legislative markers on both sides, as it were. It is no longer just the absence of PAYG deductions that may make it more difficult to characterise the relationship as one of employment, it is the presence of GST collections by the putative contractor, and his or her compliance with the regulatory requirements which apply to the provision of services by persons who are not employees, that point quite strongly against the relationship being characterised in this way. These observations are made, of course, in the context of the present case, where there is no suggestion that the respondent’s participation in the GST system did not reflect her own conscious, well-informed, intentions.

[emphasis in original]

73    Last year, in Eastern Van Services Pty Ltd v Victorian WorkCover Authority (2020) 296 IR 391 (Eastern Van Services), at [161] – [162], the Victorian Court of Appeal evinced a clear preference for the views expressed in Tattsbet v Morrow. The Court stated:

161    With respect, as a matter of principle, there is much to commend the approach taken by Jessup J. The assessment of the character of the relationship is not confined by the objective theory of contractual interpretation. The task is to be approached as a matter of substance, having regard to the terms of the contract, properly construed. There is little reason to downplay how the parties to the contract have acted and how they have treated the relationship in regulatory or revenue contexts.

162    If the parties to the contract have sought to acquit their regulatory and taxation obligations on a particular basis, and there is no contrivance in them doing so, then there is no good reason to treat those matters as no more than a reflection of self-interest or convenience.

[Emphasis added]

74    With respect, the difference perceived between these two judgments of the Full Court may be more apparent than real. And the means of reconciling the two may be present in that part of [162] in Eastern Van Services which I have emphasised. Both in law and, happily, in logic, an employment relationship, if that be its character, is not created by but antedates whatever revenue law consequence, be that a PAYG obligation or a GST obligation, attends or does not attend that relationship. But when that relationship is governed by a contract, even one formed in such an informal way as the present, and when the rights and obligations chosen by the parties as terms of that contract make particular provision in respect of revenue law or other regulatory obligations, and that provision is not inconsistent with the other rights and obligations which they have chosen, the choice made in respect of revenue law and regulatory obligations may be a useful indicator of the character of their relationship. It is in this sense that the observation long ago made by McTiernan J in Doyle about how the “wage” was paid can be regarded as prescient.

75    Indeed, such is the nature of modern trade and commerce that in many cases specification of revenue law and regulatory rights and obligations may be a decisive indicator. “Control” has feudal origins and overtones. It is quite possible to have a business, albeit a modest business, within a business. Such is the power of modern computing and the reach of the internet that the only capital investment for a viable such business may be a computer and, perhaps, too, a mobile telephone. More than ever, there are many tasks in the economy are not uniquely those of an employee.

76    As with cases on whether an individual is or is not a “resident” of a particular locale or whether income or expenditure is on revenue or capital account, there will always be cases at the margin where reasonable minds might reasonably differ as to characterisation of whether a relationship is that of employer and employee or principal and independent contractor. Also as in such cases, it is singularly important not to elevate a factor which in the overall circumstances of a given case proved decisive into a statement of general principle.

77    In the present case, Messrs Parker and Gleeson, the latter most likely on behalf of Rideshare Solutions but certainly one of the respondents, made a contract which entailed amongst other things particular revenue law rights and obligations as a term. The “label” which they gave to Mr Parker under that contract was “contractor”. The revenue law rights and obligations they chose were consistent with that label. They dealt with each other at arm’s length. The contract was not a sham. The parties adhered to the contract which they had struck for its duration. The learned primary judge found that the revenue law rights and obligations which they chose were an indicator of the character of the relationship governed by the contract. His conclusion was that Mr Parker was not an employee. Such a conclusion is, for the reasons given above, one supported by authority. It is a view one could permissibly take of the character of the relationship. Mr Parker has not demonstrated it to be in error.

78    For these reasons, the appeal must be dismissed.

Associate:    

Dated:    31 August 2021