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T7515 and T7516

 

TASMANIAN INDUSTRIAL COMMISSION

Decision Appealed - See T8234

Industrial Relations Act 1984
s.29 application for hearing of industrial dispute

Australian Liquor, Hospitality and Miscellaneous Workers Union -
Tasmanian Branch

(T7515 of 1998)
(T7516 of 1998)

and

P & O Services Pty Ltd

 

DEPUTY PRESIDENT B R JOHNSON

HOBART, 12 January 1999

Termination of employment - succession and transmission of business - employee or independent contractor - termination at initiative of employer - valid reason for termination - procedural fairness - breach of period of notice required by Security Industry Award - order that one employee be paid compensation in lieu of notice according to the award - order that one employee be paid compensation for unfair dismissal and compensation in lieu of notice according to the award

REASONS FOR DECISION

Arrangement

These Reasons for Decision contain the following parts and paragraphs:

Subject

Page

Arrangement
Introduction
Background
Succession
     The applicant's contentions
     The respondent's contentions
     Findings

Employment Status of Mr Mitchell and Mr Jones
     The applicant's contentions
     The respondent's contentions
     Findings

The Alleged Resignation of Mr Mitchell
     The applicant's contentions
     The respondent's contentions
     Findings

Valid Reason for Termination
     The applicant's contentions
     The respondent's contentions
     Findings

Remedy
     The applicant's contentions
     The respondent's contentions
     Findings

Orders

1
2
2
4
4
6
8
12
12
20
26
44
44
45
45
48
48
50
50
55
55
55
56
60

Introduction

The applicant in these matters is the Australian Liquor, Hospitality and Miscellaneous Workers' Union - Tasmanian Branch (the Union). On 12 February 1998, the Union made two applications to the President for hearings according to Section 29(1) of the Industrial Relations Act 1984. In each application, the Union alleged the existence of an industrial dispute between it and P & O Services Pty Ltd (P & O) about a member of the Union. In particular, the Union alleged that, on Thursday 5 February 1998, P & O unlawfully dismissed Mr David Mitchell1 and Mr Peter Jones.2 The Union sought reinstatement in each case.

I heard both applications together. At the hearing, Mr P Tullgren appeared with Ms P Shelley and Mr D O'Byrne for the Union. Mr S Gates of the Tasmanian Chamber of Commerce and Industry Limited appeared with Mr C Opare for P & O Services Pty Ltd.

Background

According to Mr Mitchell and Mr Jones, their dismissals arose from the following common circumstances. Security Resources Pty Ltd employed Mr Mitchell from "early July 1996"3 and Mr Jones from "on or about 20 December 1995"4. That employment, as security officers at the Royal Hobart Hospital, concluded for both individuals on 24 December 1997. From 6 June 1997 a registered enterprise agreement regulated the parties' terms and conditions of employment.5

In November 1997, Security Resources Pty Ltd told both employees that the Company could not continue to provide security services for the hospital because its tender was unsuccessful. The Company said P & O Services Pty Ltd submitted the successful tender. Security Resources Pty Ltd also told Mr Mitchell and Mr Jones that they could apply for positions with P & O.

In early December 1997, P & O advertised in "The Mercury" newspaper for "8 professional security officers".6 Mr Mitchell and Mr Jones each applied for such a position. P & O's Regional Manager for Tasmania (Mrs R Button), together with Mr C Bird (a security consultant to P & O), interviewed both applicants twice-on 11 and 15 December 1997. Mr Mitchell and Mr Jones each allege that, at the end of the 15 December interviews, Mrs Button offered them employment at $14 per hour. That offer, they said, was subject to certain conditions-that each register a business name, take out public liability insurance, and obtain a security agent's licence.7

Mr Mitchell and Mr Jones said they rejected the offer, telling Mr Bird it was not good enough. They also said they expressed concern to Mr Bird about "this business of a contract" and the absence of "any contract offer in writing".8 Mr Bird apparently told them he would negotiate with Mrs Button to see if he could get things fixed.

On 24 December 1997, P & O wrote to both Mr Mitchell and Mr Jones informing them that:9

"This letter is to confirm that P & O Support Services has accepted your tendered rate of $14.50 per hour to provide security services to our company at the Royal Hobart Hospital commencing on Monday 26 January 1998."

Mr Mitchell and Mr Jones both said they told Mrs Button they were surprised to receive such a letter. According to them, they had never tendered for any work or taken out the required insurance. On that occasion, they said they also asked Mrs Button for a copy of the proposed contract.

From 24 December 1997 to 26 January 1998, Mr Mitchell and Mr Jones continued to work at the hospital. Their alleged employer during that period was Coverall Security, a business owned by Mr Bird. However, on 26 January 1998 that Company's interest also ended. After that date, P & O provided the Hospital's security services.

On 30 January, Mr Mitchell and Mr Jones each received a copy of the contract proposed by P & O. They then sought advice from a number of sources about their rights and obligations under the contracts. Having been advised not to sign them in the form proposed, Mr Mitchell and Mr Jones said they told Mrs Button of that advice on 4 February 1998. On 5 February 1998, both individuals attended a meeting with Mrs Button and Mr Bird to discuss the matter.

Mr Mitchell and Mr Jones said the meeting did not allay their concerns about the contracts. Mr Mitchell said he told Mrs Button he would not sign the contract as presented. Instead, he asked her to negotiate a new enterprise agreement. Towards that end, he gave her a copy of a draft agreement to consider. The discussions that followed, according to Mr Mitchell and Mr Jones, were unsuccessful.

Mr Mitchell and Mr Jones then left the meeting, affirming their decision not to sign the proposed contracts. Just after noon the same day, Mrs Button and Mr Bird apparently made a last minute effort to settle the matter. Their efforts went unrewarded. About mid-afternoon, according to Mr Mitchell and Mr Jones, Mrs Button telephoned and instructed them to return their uniforms. Mrs Button, it seems, told them that P & O did not require them to fulfil their next shifts. Mr Jones said they each understood Mrs Button's instructions to mean that P & O was dismissing them.

I now turn to deal with the several contentions put to me.

Succession

P Tullgren for the applicant:

P & O Services Pty Ltd was an employer successor to a valid enterprise agreement, ie the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997. The Agreement, which the Enterprise Commissioner registered on 12 November 1997,10 commenced operation on 6 June 1997 and continues in force until 6 June 2002.11 At all material times the agreement governed, or should have governed, the employment relationships that existed between employees Mitchell and Jones and P & O.

Section 61N(c) of the Industrial Relations Act 1984 provides that an enterprise agreement is binding on "each successor to an employer who was a party to the agreement". P & O and Coverall Security clearly fall within the scope of that provision. They do so because, concerning security operations at the Royal Hobart Hospital, they were successors to an employer bound by the Agreement.

The Industrial Relations Act 1984, especially the part that provides a statutory remedy for employees and former employees regarding unfair termination of employment, is beneficial legislation. As such, the Commission should "construe it liberally in much the same way as workers' compensation legislation has been construed": Grout v Gunnedah Shire Council (1994) 57 IR 243, 259 per Moore J and the cases there cited. In other words:12

"The courts have adopted the broad approach that where an Act is curing some 'mischief' or is granting a benefit to a person, the Act should be construed generously to ensure that the mischief is remedied."

In this case, the beneficial aspects of the Act are those that create a right to seek reinstatement-or compensation if the Commission should find reinstatement impractical.

Parliament very clearly and specifically set out in Section 61N(c) of the Act, without contradiction or absurdity, who registered enterprise agreements bind. According to the "literal approach", "a statute is to be expounded according to the intent of the Parliament that made it": Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129, 161-162 per Higgins J. In the present case, there can be no doubt that "the intention of Parliament was to bind employers as successors".13 That is because general words must be given their plain and ordinary meaning unless the contrary is shown: Cody v J H Nelson Pty Ltd (1947) 74 CLR 629, 647 per Dixon J. In assigning to the words used their ordinary and current meaning the Commission must also have regard to the context in which the Act makes use of them. In that respect the Commission should guide itself by "commonsense, experience of the world and local knowledge"14 having regard to the meaning of the Act as a whole rather than "word by word".15

The Commission must also give the words in question a construction "that produces the greatest harmony and the least inconsistency": Australian Alliance Assurance Co Ltd v Attorney-General (Qld) [1916] St R Qd, 161 per Cooper CJ. In that light the Commission cannot find that P & O and Coverall Security were not successors to Security Resources Pty Ltd concerning, at least, security operations at the Royal Hobart Hospital. Such an outcome would circumvent Parliament's intention, because it would effectively nullify every enterprise agreement in which there had been a succession.

Even should the Commission take the "purpose approach" to statutory construction, ie the intention of the legislature, the argument that P & O and Coverall Security were successors to Security Resources Pty Ltd still stands. Parliament's clear intention, in the present case, is to provide a scheme for enterprise agreements and their regulation and to bind both employers and employees to such agreements. Any suggestion that an employer could be a successor to a business or part of a business, but not be bound by a relevant registered enterprise agreement, would put that agreement to nought, contrary to Parliaments' intention.

The Commission must have regard to the consequences of a particular statutory construction, ie if inconvenience will result from one construction but not from another, the latter construction is to be preferred: Bristricic v Rokov (1976) 11 ALR 129 and Hall v Jones (1942) 42 SR (NSW) 203. A finding that it is a successor to Security Resources Pty Ltd might inconvenience P & O. However, a finding that circumvented Parliament's intention regarding operation of the enterprise agreements' legislation would be a greater inconvenience. The Commission's primary approach, like that of the courts, should be "to examine the consequences that flow from requiring strict compliance with a procedure laid down in an Act".16 In the present case, the consequences of a finding that there was no succession are significant.

It is proper for the Commission, in construing an Act, to adopt a meaning that will avoid consequences that appear irrational or unjust: Public Transport Commissioner of New South Wales v Murray-Moore (NSW) Pty Ltd (1975) 6 ALR 271. Any decision that suggested the Commission might act to undo Parliament's intention regarding operation of the enterprise agreements' legislation would create an appearance of irrational and unjust behaviour.

The law obliges the Commission, in construing an Act, to ensure validity and attainment of the object of the legislation.17 The long title of the Industrial Relations Act 1984 states that the Commission's jurisdiction, among other things, is "to encourage workplace bargaining". Any finding by the Commission in this case that there is no succession would effectively end workplace bargaining. In that regard, the Commission must be mindful of its obligation to read the Act as a whole18 and, in that context, to have regard to the fact that it is beneficial legislation.

A long line of authority, commencing with Shaw v United Felt Hats Proprietary Limited (1927) 39 CLR 533, supports the contention that P & O and Coverall Security, in a relevant sense, succeeded Security Resources Pty Ltd. On that authority, the substance of the businesses must be the same. However, Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 65 ALJR 58 at 63 is authority for the proposition that it is sufficient if a successor performs major parts of the original employer's business. The issue "is whether there is a substantial identity between the old activities and those now carried on ... which correspond with the old activities". In the present case, the substantial identity lies in the provision of security services to the Royal Hobart Hospital because it involved Security Resources Pty Ltd, Coverall Security and P & O. It is irrelevant that P & O might also provide refuse removal and cleaning services.

A distinction must be drawn between the means of carrying on a business, and the business itself: Meat & Allied Trades Federation of Australia v A/Asian Meat Industry Employees Union (1995) 58 IR 90. The transmission of ownership of the means to carry on a business is not the business itself-one employer must acquire the business or part of the business of another employer. In the present case P & O, and before it Coverall Security, operates or operated a part of the business that comprised the business of Security Resources Pty Ltd. Consequently, both P & O and Coverall Security operates or operated the same business or part of the same business as Security Resources Pty Ltd.

S Gates for the respondent:

P & O acknowledges existence of the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997. The Company also accepts that the parties to that agreement registered it pursuant to the provisions of Part IVA of the Industrial Relations Act 1984. In that regard, the agreement remains in force until 6 June 2002. However, it is clear from the words of Section 61N(c) of the Act that P & O, if the agreement is to bind the Company, must be the successor of an employer that is a party to the agreement.

The decided cases relied on by the applicant regarding succession or transmission are not at all to the point of the facts in the present matter. Not one of them interprets or applies paragraph (c) of Section 61N of the Industrial Relations Act 1984. Consequently, they do not assist the Commission in determining the issues that fall from the current case.

The evidence is that, at the time Security Resources lost the Royal Hobart Hospital contract, it retained several other operational contracts, including Incat and Calvary Hospital.19 It is quite plain that after Security Resources ceased to provide security services at the Royal Hobart Hospital, the company nevertheless continued to operate as a business by providing security services in satisfaction of the remainder of its continuing contractual obligations.

Coverall Security provided some interim security services to the Royal Hobart Hospital. In doing so, that company took on some persons previously employed by Security Resources. However, there is no evidence that Coverall Security purchased Security Resources or any part of its goodwill, plant or equipment.

When P & O commenced providing security services at the Royal Hobart Hospital, it engaged some of the individuals who were with Coverall Security and, indeed, before then with Security Resources. However, P & O neither purchased the goodwill, plant or equipment of either company nor transferred persons as employees from those companies. P & O simply won a tender.

In the circumstances P & O is not a successor to either Coverall Security or Security Resources within the meaning of Section 61N(c) of the Act. That is because:

  • P & O did not purchase and neither Coverall Security nor Security Resources sold the goodwill, plant and equipment residing in each of the latter two companies.
  • No transfer of employees occurred from either Coverall Security or Security Resources to P & O.
  • Security Resources continues to operate as a corporate entity and remains a party to and uses the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997.
  • P & O and Coverall Security are not parties to the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 and could not be by virtue of the operation of Part IVA of the Act.
  • The Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 is not divisible in the sense that every time the company loses a contract, the agreement nevertheless attaches itself to each new employer that successfully tenders for that contract.

It is clear that Mitchell and Jones worked for Security Resources, Coverall Security and, finally, P & O. However, it is a nonsense to suggest that, on the facts and circumstances of this case, the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 follows them and attaches to P & O. In short, the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 did not and does not apply in any way to either Coverall Security or P & O.

Findings

Section 61N(c) of the Act provides that:

"A registered enterprise agreement is binding on each successor to an employer who was party to the agreement."

In the current proceedings no party disputed the following facts:

  • The Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 is a registered enterprise agreement.
  • The particular agreement came into effect on 6 June 1997, is currently operative, and will continue in force until 6 June 2002.
  • Security Resources is the only employer party to the agreement.
  • P & O, if not bound by the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997, is bound by the Security Industry Award.

In those circumstances, the sole question that arises for determination is whether Coverall Security was and P & O is a "successor to" Security Resources, the only employer party to the relevant agreement.

There is no relevant Tasmanian case law that deals with Section 61N(c) of the Act and what constitutes "a successor to an employer who was party to the agreement". Towards the end of proceedings Mr Tullgren, for the applicant, called in aid a decision of Commissioner Gozzi of this Commission in Marney v Croucher Pty Ltd re payment of pro-rata long service leave.20 Mr Tullgren, albeit perhaps faintly, relied on that decision as supporting in principle his submission that, on the facts of the present case, there was an employer succession in terms of Section 61N(c) of the Act.

However, the Long Service Leave Act 1976, under which the proceedings before Gozzi C arose, contains a very specific deeming provision regarding "transmission of business".21 The Act also expressly defines what "transmission" means in relation to an employer's business.22 Those provisions are so substantially different from Section 61N(c) that, in my opinion, they offer little assistance in determining the meaning of "succession" in the present case.

There is however, without taking the matter too far, some similarity between Section 61N(c) and Section 149(1)(d) of the Workplace Relations Act 1996 (Cth) and its predecessors. The applicant submitted, in effect, that I should look to the case law surrounding those provisions for guidance in resolving the present issue.23 I propose to take that approach, and in so doing, reject the respondent's contention that those cases do not assist the Commission.24

In the first place I accept the applicant's contention that, as a general proposition, I should regard Section 61N(c) as beneficial legislation. That is to say, I should construe the provision generously so that employers do not avoid the settled rights of employees.25 However, having regard to what follows, I do not see how that principle assists the applicant in the present case.

Mr Tullgren also asserted, in effect, that the plain and ordinary meaning of the words used in Section 61N(c) demonstrates that "the intention of Parliament was to bind employers as successors".26 Any other outcome, he suggested, would create an appearance of unjust and irrational behaviour.27

It seems to me that, viewed in one light, Mr Tullgren's words are sensibly different from those of Section 61N(c) of the Act, ie "successor to an employer who was party to the agreement". I assume, however, that his expression is simply an ellipsis of the words actually used in the Act.

In determining whether, using their "plain and ordinary meaning", the words of Section 61N(c) have application in the present case, it is necessary to closely examine the facts to determine exactly what occurred between the parties. Security Resources is clearly a corporate entity. The Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 implicitly acknowledges that the Company is bound by the Security Industry Award to the extent that the Agreement does not replace those award provisions.28

There is nothing in the enterprise agreement or in the evidence that specifically identifies the nature of the Company's business. However, because the Security Industry Award applies to "the industry of Security and Watching Services"29 it seems safe enough to conclude that, as far as it may involve these proceedings, the Company's business concerns provision of security and watching services.

In the course of conducting that business the Company, according to the evidence, held at the relevant time a number of commercial contracts to provide security services. Those contracts included, at least, Incat, Calvary Hospital and the Royal Hobart Hospital.30

In late February 1997, the Royal Hobart Hospital apparently called tenders for the provision of security services.31 Those services, it seems, were to commence at the end of December 1997. Evidently, according to the evidence of witness Button,32 the contract held by Security Resources expired about that time. Certainly, Mitchell and Jones both finished their employment with Security Resources on 24 December 1997.33 Nevertheless, the evidence suggests that some time before 11 November 1997 the Hospital apparently informed Security Resources that its tender was unsuccessful. The Hospital also told Security Resources that the successful tenderer was P & O.34

Because Mitchell and Jones ended their employment with Security Resources on 24 December 1997 I assume that, on or about that date, the Company's contract with the Hospital also expired.

What do those events demonstrate? In the first place, it is quite clear that P & O, the incoming service provider, acquired a commercial contract at the expense of Security Resources, the outgoing service provider. In short, one company gained some work and another lost some work. Those events occurred because the then current contract held by Security Resources expired, presumably because of effluxion of time, and the Company was unsuccessful in its attempt to renew the arrangement.

Ultimately, P & O did not commence operations at the Hospital until 26 January 1998. During the intervening period-25 December 1997 to 25 January 1998-Coverall Security provided the Hospital with security services.

As a result of those activities, according to all the evidence, Security Resources did not cease to trade, did not cease to be the employer party to the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 and continued to provide security services to the remainder of its clients. The Company certainly lost work, first to Coverall Security and then to P & O, and certainly dismissed some of its employees (Mitchell and Jones, for example) as a consequence of P & O's success. The evidence also shows there was no transfer of employees from Security Resources to either Coverall Security or P & O.

In Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation35 the High Court considered "successor" provisions contained in the rules of the Australian Transport Officers Federation (ATOF). The model for those provisions was the "successor" provisions of the then Commonwealth legislation.36 The Court's reasoning in that case appears no less applicable to the facts of the current matter-as, indeed, Mr Tullgren in effect submitted.37 The following extract from the case report head note provides sufficient background for present purposes:38

"The [Roads and Traffic Authority of New South Wales (the RTA)] in pursuance of the Transport Administration Act 1988 (NSW), virtually took over the functions previously performed by the Departments of Motor Transport [the DMT] and of Main Roads [the DMR] and by the Traffic Authority of New South Wales. Employees of abolished departments were transferred to the employment of the new Authority which also acquired the assets, liabilities and responsibilities of the body corporate formerly known as the Commissioner for Motor Transport [the CMT]."

Before the "take over", the CMT was "responsible for the administration of the DMT."39

In determining that the RTA was the successor of the CMT in relation to ATOF's rules, the High Court distinguished the early case of Shaw v United Felt Hats (the substance of the businesses must be the same),40 observing that:41

"According to the natural reading of the language of the successor clause, the inquiry should be directed to ascertaining whether the business or the activities formerly carried on by the CMT are still carried on by the RTA, notwithstanding that the RTA also carries on one or more other substantial activities."

and later, that:

"Accordingly, on the reading of the clause which we favour, the ultimate issue is whether there is a substantial identity between the old activities and those now carried on by the RTA which correspond with the old activities."

In applying the above test the Court noted that "not all the functions previously performed by the DMT under the CMT are now performed by the RTA" and, further, that "the major part of the functions of the DMT are now undertaken by the RTA and the bulk of the DMT staff have been transferred to the RTA". The Court then went on to conclude that "the RTA is the successor of the CMT, notwithstanding that the major activities of the RTA are the former functions of the DMR and predominantly the staff of the RTA are former employees of the DMR".42

Paraphrasing the Court, the issue in the present matter, therefore, is whether there is a substantial identity between the old activities, ie those of Security Resources, and those now carried on by P & O which correspond with the old activities. The evidence discloses that the only corresponding activity of Security Resources subsequently carried on by, first, Coverall Security and, now, by P & O is the provision of security services at the Royal Hobart Hospital. In addition, while Mitchell and Jones are certainly former employees of Security Resources, that Company did not transfer them to either Coverall Security or to P & O.

In my opinion that evidence does not disclose the necessary "substantial identity" between the old activities, ie the functions, of Security Resources as a corporate entity and the activities now carried on by P & O. To the extent that P & O's activities-and those of Coverall Security-do, or did, correspond with the activities of Security Resources, ie provision of security services at the Royal Hobart Hospital, they do not or did not include Incat and Calvary Hospital, to say nothing of any other clients for whom Security Resources may have provided security services at the relevant time. Consequently, in my view, it cannot be said that P & O undertook the major part of the functions of Security Resources.

I have dealt with this issue at some length because it comprised an essential focus of the applicant's case. Mr Gates, however, pressed an alternative view. He submitted that P & O could not be a party to the Security Resources P/L ACN 052 408 474 Enterprise Agreement by virtue of the operation of Part IVA of the Act.43 As I construe his submission, it appears to rely on the fact that Part IVA makes it plain that, related corporations excepted-no party suggested Security Resources, Coverall Security and P & O fell into that category-there can only be one employer party to any particular registered enterprise agreement.44 In that regard I note the reference in Section 61N(c) of the Act to the past tense, ie "employer who was a party to the agreement" (emphasis is mine), which appears to support the contention that, on the facts of this case, Coverall Security was not and P & O is not, and could not have been or could not be, Security Resources' successor. That, it seems to me, is because Security Resources never ceased to (i) operate as a business; (ii) continue to use its registered enterprise agreement; and (iii) be the employer party to the Security Resources P/L ACN 052 408 474 Enterprise Agreement. In my opinion, such an outcome reflects both commonsense and the plain words of the statute and does not produce consequences that, in Mr Tullgren's words, are "irrational or unjust."45

Accordingly, after considering all the evidence, I have come to the conclusion, and so find, that in terms of Section 61N(c) of the Industrial Relations Act 1984, P & O is not a successor to Security Resources. In other words-

(a) having regard to Mr Tullgren's submission, there was no succession by P & O to the business of Security Resources because there was no "substantial identity" between the old and the new activities of P & O that corresponded with the major part of the functions of Security Resources; and

(b) having regard to Mr Gates' submission, there was no succession by P & O to the business of Security Resources because Security Resources never ceased to (i) operate as a business; (ii) continue to use its registered enterprise agreement; and (iii) be the employer party to the Security Resources P/L ACN 052 408 474 Enterprise Agreement.

Employment Status of Mr Mitchell and Mr Jones

P Tullgren for the applicant:

It is a fantasy to suggest that Mr Mitchell and Mr Jones were contractors. P & O's arrangements in that regard are a contrivance by the Company to avoid industrial award coverage. Several authoritative sources assist in determining whether an individual is an employee or an independent contractor.

Mitchell and Jones were not contractors but employees, because:

(1) Australian Taxation Office Rulings

  • P & O employed Mitchell and Jones, being two of a group of perhaps eight employees, to provide labour as a security service. P & O did not engage the two employees to perform a particular function or to complete a specific job-their task was to walk around and maintain the security service. Mitchell and Jones performed the whole or principle part of the labour before P & O paid them for their efforts.46

  • P & O's employment of Mitchell and Jones involved each of them in individual personal exertion.47

  • P & O's relationship with Mitchell and Jones was clearly, in each case, one of master and servant. P & O told the employees what to do, provided them with rosters and told them to go to Mr Bird if they had any problems.48

  • All P & O required of Mitchell and Jones was the provision of labour, which greatly exceeded 50 per cent of the value of their respective contracts.49

  • The work required of Mitchell and Jones by P & O had a "preconceived, determined or defined result",50 ie to provide the necessary security service. In performing those duties, Mitchell and Jones carried out their activities "under similar physical or working conditions to that under which an employee as such would perform the work".51 It was not the employees' task to create or devise a security service or to implement new arrangements. Mitchell and Jones were to do what P & O told them, nothing more or less. They certainly had no freedom to structure or define the result of their work.52

  • Mitchell and Jones each performed their work under similar financial arrangements to that of an employee doing the same work. All that Mitchell and Jones brought to the relationship with P & O was, in each case, a pair of shoes, a bit of webbing and some computer paper on which they printed their invoices.53

  • No written contract existed between P & O and Mitchell and Jones. In addition, P & O's proposed contracts concerned each individual employee rather than the particular work P & O expected them to execute.54

  • P & O employed Mitchell and Jones to work at the employer's place of business-the Royal Hobart Hospital-based on a continuing roster. The Company did not employ them for a set period of time or to perform a specified task.55

  • Except for a few sheets of computer paper, Mitchell and Jones incurred no expense in the provision of plant, equipment and materials. P & O also provided floor space, power, telephone, etc.56

  • P & O directed the manner in which Mitchell and Jones performed their work because it instructed them to go to Mr Bird with any problems that arose. Both Mitchell and Jones were under an obligation to obey P & O's directions.57

  • P & O required Mitchell and Jones to personally perform the work allocated to them. There is no evidence that shows they were free to allow sub-contractors to perform their work. By means of daily rosters, P & O controlled the period in which Mitchell and Jones were to perform their work.58

  • There is no evidence to say that any leave of absence required by Mitchell or Jones was not subject to P & O's discretion. As for other entitlements, eg holidays, sick leave etc, Mitchell and Jones never attempted to exercise such a right because they only worked for a short period of time with P & O.59

  • P & O paid Mitchell and Jones an hourly rate based on an award, in this case the Cleaning and Property Services Award-among other things, a clear prima facie breach of the Security Industry Award. The Company also made regular fortnightly payments to Mitchell and Jones, albeit on the production of invoices. The evidence discloses, however, that P & O's requirement for Mitchell and Jones to submit invoices was simply part of an elaborate plan to alter their tax status.60

  • There is no evidence, such as a signed document or contract, that P & O required Mitchell and Jones to carry the cost of any poor workmanship or negligence on their part. The fact that neither Mitchell nor Jones possessed public liability insurance supports this conclusion-although P & O required them to obtain such insurance and arguably paid them for that purpose.61

  • Neither Mitchell nor Jones had any workers' compensation insurance. Had they suffered injury at work during their period of employment by P & O, they would have had a claim against the Company.62

  • The Company's requirement of Mitchell and Jones to provide security work at the Royal Hobart Hospital was not an accessory to, but an integral part of P & O's business.63

  • Mitchell and Jones had no other paid work and were not free to accept any such work because P & O required them to work 12-hour shifts. Mitchell and Jones performed their work for a predetermined salary or wage, were not free to refuse to perform the tasks allocated by P & O and were not liable for any financial losses incurred by the Company in its employment activities.64

  • The fact that Mitchell and Jones operated under business names did not exempt them from coverage of the Commonwealth Superannuation Guarantee (Administration) Act 1992. That is because they were persons who had contracted wholly or principally for their labour as individuals.65

(2) Case Law

One way of determining the employment status of Mr Mitchell and Mr Jones is to pose the question: Were they employees engaged pursuant to a contract of service or were they contractors engaged pursuant to a contract for services? In the present case, there are competing factors that point in each direction, which the Commission must ultimately balance.

The leading authority in respect of this question is the High Court case of Stevens v Brodribb Sawmilling Company Proprietary Limited (1985-1986) 160 CLR 16. Also referred to and relied upon are the observations of Von Doussa J in Paterson v State of South Australia (1997) 73 IR 400; Dixon J in Humberstone v Northern Timber Mills (1949) 79 CLR 389; Gray J in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179; Lord Brandon of Oakbrook in the Privy Council judgment of Narich Pty Ltd v Commissioner of Pay-Roll Tax 50 ALR 417 citing Lord Denning, Master of the Rolls in Massey v Crown Life Insurance Co (1978) 1 WLR 676; Meagher JA in Vabu Pty Limited v Federal Commissioner of Taxation 96 ATC 4898; Building Workers' Industrial Union of Australia and Others v ODCO Pty Ltd 99 ALR 735; the judgment of the Privy Council in Lee Ting Sang v Chung Chi-Keung and Another [1990] 2 AC 374; and Cooke J in Market Investigations Ltd v Minister of Social Security [1969] 2QB 173.

Having regard to the decided authorities, the following observations show that when P & O engaged Mr Mitchell and Mr Jones, the relationships on each occasion were those of employer and employee.

Fundamental test: In Lee Ting San v Chung Chi-Keung the Judicial Committee of the Privy Council quoted with approval the observations of Cooke J in Market Investigations that:66

"The fundamental test to be applied is this: 'Is the person who has engaged himself to perform those services performing them as a person in business on his own account?' If the answer to that question is 'yes', then the contract is a contract for services. If the answer is 'no', then the contract is a contract of service."

Their Lordships, after noting that all the indicia pointed towards the appellant being an employee, went on to make the following observations: 67

"The applicant did not provide his own equipment, the equipment was provided by his employer. He did not hire his own helpers; this emerged with clarity in his evidence when he explained that he gave priority to the first respondent's work and if asked by the first respondent to do an urgent job he would tell those he was working for that they would have to employ someone else: If he was an independent contractor in business on his own account, one would expect that he would attempt to keep both contracts by hiring others to fulfil the contract he had to leave. He had no responsibility for investment in, or management of, the work on the construction site, he simply turned up for work and chipped off concrete to the required depth upon the beams indicated to him on a plan by the first respondent. There is no suggestion in the evidence that he priced the job which is normally a feature of the business approach of a sub-contractor; he was paid either a piece-work rate or a daily rate according to the nature of the work he was doing. It is true that he was not supervised in his work, but this is not surprising, he was a skilled man and he had been told the beams upon which he was to work and the depth to which they were to be cut and his work was measured to see that he achieved that result. There was no question of his being called upon to exercise any skill or judgment as to which beams required chipping or as to the depths that they were to be cut. He was simply told what to do and left to get on with it as, for example, would a skilled turner on a lathe who was required to cut a piece of metal to certain dimensions."

These indicia, when applied in the present case to the facts surrounding Mitchell and Jones, show that they were in exactly the same position as the appellant Lee Ting Sang. The facts are that Mitchell and Jones were not contractors at all.

Integration or organisation test: In Lee Ting Sang, their Lordships found that "the applicant's work was not accessory to the first respondent's business but integral to it".68 The test to which their Lordships there referred is the integration test proposed by Denning LJ in Stevenson Jordan & Harrison Ltd v Macdonald & Evans69-called the "organisation test" in Stevens v Brodribb.70

In the present case, P & O did not call in Mitchell and Jones to perform a specific task. The Company employed them according to a continuous roster to perform security functions integral to P & O's business. In the circumstances, Mitchell and Jones were not an accessory or peripheral, but integral to or part of P & O's business. Those facts point to Mitchell and Jones being employees, ie a part of P & O's business, rather than independent contractors.

Control test: In terms of "control", Mitchell and Jones had no choice but to work at the Royal Hobart Hospital. That is what P & O directed them to do-if they did not work at the Hospital, they did not work at all.

P & O required Mitchell and Jones to work 12-hour shift rosters according to a set pattern that did not vary from week to week. P & O fixed the rosters for providing security services to the Hospital and determined the number of hours that each employee would work.

The Hospital provided a list of tasks for security personnel to perform. However, P & O and/or Mr Bird told Mitchell and Jones that, in case of any problems, they should not deal with the Hospital. Instead, they were to deal with P & O or Mr Bird.

P & O maintained certain dress requirements for its employees. The Company stipulated that it was the responsibility of Mitchell and Jones to wear the uniform provided by P & O.

P & O or Mr Bird dealt with any problems arising from the work of Mitchell and Jones. The Hospital clearly expected P & O to take whatever action was necessary to attend to a complaint or rectify a problem.

By way of summary, P & O clearly controlled the way in which Mitchell and Jones did their work, where they worked, the number of hours they worked, the clothing they wore and the equipment they used. In terms of Stevens v Brodribb both P & O and Coverall Security exercised a right to "control" Mitchell and Jones in the performance of their work in a way that is strongly suggestive of an employer and employee relationship.

Risk-taking for profit: In Vabu v Federal Commissioner of Taxation the New South Wales Court of Appeal found that couriers engaged by Vabu were not employees at common law. In coming to its decision the Court found that, although Vabu "had a deal of control over its couriers, other considerations led to the conclusion that on balance the couriers were not employees".71 Those "other considerations" took into account that the couriers "supplied their own vehicles, they had to bear the expense of providing for and maintaining those vehicles, and they paid for the running repairs, petrol, insurance and registration".72 Meagher JA, referring to the couriers, went on to quote McKenna J in Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance [1968] 2QB 497 (526):73

"the ownership of the assets, the chance of profit and the risk of loss in the business of carriage are his risk and not the company's".

Such risk-taking, His Honour concluded, pointed to the couriers being independent contractors.

In the present case, except to the very limited extent of shoes and webbing, neither Mitchell nor Jones provided their own equipment. P & O provided the work sites, the employee's uniforms and all other equipment. Furthermore, there is no suggestion in the evidence that Mitchell and Jones were taking a risk in order to make a profit. They did not, as did the couriers in Vabu, provide their own capital and face the loss of that capital if the venture did not work. Indeed, P & O was the only party in a position to make a profit. These circumstances strongly suggest that Mitchell and Jones were not working on their own behalf as contractors but, rather, as servants of P & O.

Delegation: The power to delegate is an important factor in deciding whether a person is an employee or an independent contractor: Stevens v Brodribb. The evidence suggests that Mitchell and Jones could not delegate their tasks to other persons because to do so was contrary to their arrangements with P & O. If for some reason either Mitchell or Jones could not work on any particular day, it was their duty to contact P & O to make other arrangements. There is no evidence that it was the responsibility of Mitchell or Jones, in those circumstances, to make their own arrangements or to hire another or other persons as replacements. In other words, the duties performed by Mitchell and Jones were personal to them.

Neither Mitchell nor Jones ever arranged for another individual or individuals to work for P & O in their stead. The fact that they did not do so suggests they did not have the authority to delegate. That is because neither employee was carrying on a business of providing persons to patrol, watch and guard property-they were simply providing their own labour and nothing more.

The parties' agreement concerning the nature of their relationship: In Porter, Gray J observed that "although the parties are free, as a matter of law, to choose the nature of the contract which they will make between themselves, their own characterisation of that contract will not be conclusive".74 The evidence before the Commission is that the parties did not agree on the nature of their relationship. Mitchell and Jones regarded themselves as employees. When P & O gave Mitchell and Jones copies of the proposed contract they obtained legal advice, which reinforced their view regarding the nature of their relationship with the Company. They indicated preparedness to and did continue negotiations concerning the contract. However, at all material times in their relationship with P & O, Mitchell and Jones were not contractors, but employees. Neither Mitchell nor Jones ever referred to themselves as contractors.

In ODCO, the Court observed that:75

"Standing alone, the mode of remuneration being payment at an agreed hourly rate is equally applicable, on the evidence, to persons who are concededly sub-contractors as to casual employees picked up for a day or part of a day."

P & O paid Mitchell and Jones at a fixed hourly rate regardless of the hours they worked on any particular day or whether they worked at weekends. On its own, that fact in the present case is neutral concerning whether Mitchell and Jones were contractors or employees. However, in Vabu, the Court regarded as significant the fact that the couriers received payment, not by way of salary or wages, but by reference to the number of successful deliveries made each day.76 Similarly, in Stevens, the timber getters received payment by reference to the volume of timber they delivered to the mill.77 In the present case, however, the fixed hourly rate paid by P & O to Mitchell and Jones did not relate to any results produced by them in the context of Vabu and Stevens. That evidence tends to suggest Mitchell and Jones were not contractors, but employees.

Finally, there is the decision of President Westwood of this Commission in Australian Workers Union, Tasmania Branch v Michael Garland and Katherine Anne Schaefer.78 In that matter the President had to determine whether the skipper of a vessel was an independent contractor or an employee. The President ultimately found that the skipper was an independent contractor because, at the time he signed the relevant contract, he evidenced a preparedness to accept the status of independent contractor rather than that of employee.79 The President's decision reinforces the position of Mr Jones and Mr Mitchell in the present case. Neither individual entered into or signed any relevant contract with P & O.

Tax considerations: It is arguable that because P & O did not deduct tax from Mitchell and Jones, that fact points to them being independent contractors rather than employees. Indeed, P & O intended to impose the Prescribed Payments System on Mitchell and Jones as a pre-condition of engagement. However, in Vabu Meagher JA accepted as true a submission on behalf of the respondent Federal Commissioner of Taxation that "the tax documents should be disregarded because they are self-serving declarations by the taxpayer and as such are hardly evidence of anything".80 In the circumstances of the present case, having regard to the relevant tax rulings, Mitchell and Jones were employees, not contractors.

Summary

There are some indicia that suggest the relationship between P & O and Mitchell and Jones was one of contractor and subcontractor. However, based on the evidence, the strong balance of indicia point to the relationship being at all times one of employer and employee.

In that regard, the following indicia are the most important:

  • The degree of control exercised by P & O over Mitchell and Jones. They did not exercise control, nor did the hospital where they worked;

  • Mitchell and Jones did not engage in profit-making activities when they worked at the hospital as security guards. P & O was the only party in a position to make a profit. Mitchell and Jones took no risks, did not provide-except to a very limited extent-the equipment necessary for the job, and did not put their capital at risk; and

  • Neither Mitchell nor Jones could delegate their duties to other persons.

The above indicia strongly suggest that Mitchell and Jones did not work as security guards at the hospital in pursuit of their own independent businesses. Rather, all the evidence indicates they were working for P & O. Neither Mitchell nor Jones engaged in activities that involved a profession, trade or distinct calling. They did not provide their own place of work and they did not create, by their activities, any commercial goodwill or other saleable assets.

The contracting arrangement upon which P & O relied was nothing more than a sham. In Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454 Lockhart J said:

"A 'sham' is therefore, for the purposes of the Australian law, something that is intended to be mistaken for something else or that it is not really what it purports to be. It is a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive."

There is no evidence that Mitchell and Jones entered into a sham arrangement with P & O. To the contrary, the evidence is that P & O attempted to foist upon them a sham arrangement for the Company's benefit. Furthermore, there is no evidence that shows P & O and Mitchell and Jones reached any agreement on the categorisation of their relationship. To the contrary, the evidence is that there was no agreement at all.81

In all the circumstances, Mitchell and Jones were clearly employees. Clause 2 of the Security Industry Award provides that, as to scope, the "award is established in respect of the industry of Security and Watching Services". It follows that, in the absence of any signed contractual arrangements to the contrary and because it has common rule application, the award applies to both P & O and Mitchell and Jones.

Because the award governed the parties' workplace relations, P & O could only terminate Mitchell and Jones' contracts of employment by reference to relevant award provisions. P & O, in dismissing Mitchell and Jones in the manner in which it did, breached the notice provisions of the Security Industry Award.

S Gates for the respondent:

Mr Mitchell and Mr Jones were in fact independent contractors who provided security services to P & O. The taxation rulings relied on by the applicant may reflect a summary of the various indicia which courts tend to look at for purposes of deciding whether persons are employees or independent contractors. However, the rulings do not say that Mr Mitchell and Mr Jones were in fact employees of P & O.

The applicant's assertion that Mr Mitchell and Mr Jones were employees is nothing more than a rationalisation, so coloured for purposes of the present proceedings. At the relevant time neither Mr Mitchell nor Mr Jones held a belief that they were employees.

There is nothing in the facts of this case, upon application of either the control test or the multiple criteria test, which infers directly or indirectly that Mitchell and Jones were employees. All the evidence is consistent with the two individuals being independent contractors.

The applicant's contention that Mr Mitchell and Mr Jones were employees until such time as they signed their respective contracts does not reflect the facts. The evidence shows that Mitchell and Jones:82

  • never received paid sick leave or annual leave;

  • at all times knew the difference between an employee and an independent contractor, despite having only ever worked as an employee;

  • were told at the second interview (15 December 1997) that they would be contractors;

  • were told there would be no income tax deducted from moneys paid to them;

  • were told they must set up their own businesses, arrange insurance cover, and submit invoices to P & O for services rendered;

  • were told by Mrs Button, by way of clarification in discussions that followed the letters of 24 December 1997,83 that they were contractors;

  • each completed a "Contractor's Engagement Form";84

  • acknowledged by their statements at the meeting of 5 February 1998 that they knew the proposed arrangements were those of contracts for provision of services to P & O; and

  • knew that P & O never said the Company engaged them as employees.

The tests for distinguishing between an employee and an independent contractor are considerable in number. However, they essentially involve three principal areas: (i) the intentions of the parties; (ii) the question of control and (iii) the multiple criteria test. Previous decisions of the courts deal with their particular facts and concern different industries. As such they are of limited assistance and really only serve to illustrate that, as Mahoney JA said in Articulate Restorations and Development Pty Ltd v Crawford (1994) 57 IR 371, 381:

"... the legal criteria by which the two are to be distinguished are themselves indeterminate in the sense that the application of them to the facts does not produce a plain and obvious result. The result of the application of the tests applied by the courts leaves a good deal to the judgment or discretion of the individual judge."

The ultimate result, as Gray J said in Re Porter; Re Transport Workers Union of Australia (1989) 34 IR 179, 184, "may be a matter of impression".

What the cases say, in essence, is that their application will not, in themselves, give a clear and unqualified answer. The Commission must balance what is on one hand with what is on the other. At the end of the day, the exercise is not necessarily a matter of strict science but simply a matter of impression.

(1) The Parties' Intentions

In the first place, it is important to determine the parties' intentions. In that regard, it is essential to identify the true nature of their agreement. In Connelly v Wells (1993) 55 IR 73 Gleeson CJ, at p. 74, observed that:

"Where the relationship between two persons is founded in contract, the character of the relationship depends upon the meaning and effect of the contract. In the absence of a suggestion that a contract was varied after it was originally made, its meaning and effect must be determined as at the time it was entered into. If the contract is in writing, then the court which is considering the nature of the relationship between the parties is directed to an examination of the terms of the written agreement in the light of the circumstances surrounding its making. (Narich Pty Ltd v Commissioner of Pay-Roll Tax [1983] 2 NSWLR 597 at 601).

In some cases, of which the present is an example, the contract may have been entered into without writing, and in circumstances of considerable informality. This may mean that it is more difficult to reach a conclusion as to when the contract was entered into, and as to the terms of the agreement which the parties made. The conduct of the parties may need to be examined for the purpose of reaching a conclusion as to their common intention as to the terms and conditions on which they were contracting with one another. However, the basic principles remain the same."

In applying His Honour's approach to the facts of the present case the parties clearly and unequivocally established their relationship at the meeting (or second interview) that occurred on 15 December 1997. That relationship was one of principal and independent contractor and not one of employer and employee. Confirmation of that relationship appears in the letters of 24 December 199785 that P & O sent to Mr Mitchell and Mr Jones and in the "Contractor's Engagement Form".86 That relationship continued with both individuals and without variation until 5 February 1998, when Mr Mitchell and Mr Jones ceased to provide any services to P & O.

The evidence shows that P & O never offered contracts of employment to Mr Mitchell and Mr Jones and never intimated to them it proposed to engage them as employees. The only such inference-if it is an inference at all-flows from the newspaper advertisement of early December 1997.87 However, that event preceded the 15 December meeting. Everything that occurred on and after that date reflected a relationship of principal and independent contractor. The conduct of P & O and Mitchell and Jones during the whole course of their dealings from 15 December onwards shows an intention to create relationships of principal and independent contractor.

The sequence of events establishing that relationship commences with the meeting of 15 December. There next followed the letters of 24 December; Mitchell and Jones' efforts to obtain the required insurance; the performance of work by Mitchell and Jones as contractors to Coverall Security; the establishment and negotiation of an hourly rate with P & O; Mitchell and Jones' invoicing of P & O for services rendered; and, finally, Mr Mitchell's efforts to obtain a security agent's licence.88

In addition, neither Coverall Security nor P & O deducted PAYE tax instalments from payments made to Mr Mitchell and Mr Jones; there was no accrual of annual leave or sick leave by either Mitchell or Jones; and neither of them received payment for public holidays that they did not work. At the 5 February 1998 meeting both Mr Mitchell and Mr Jones actively discussed the proposed subcontractor's agreement. They talked about their concerns and suggested amendments to the document. It was at that meeting that they first indicated they did not wish to be subcontractors but preferred to be employees.

Mr Mitchell told P & O on 5 February 1998 that he would only accept engagement under an enterprise agreement.89 The further evidence is that he produced a draft agreement for negotiation.90 In that draft Mr Mitchell proposed an hourly rate of $12.25, a rate lower than the $14.50 nominated in P & O's proposed agreement. That evidence clearly demonstrates Mr Mitchell's acknowledgment that he was a contractor, not an employee. Obviously, leading up to the meeting of 5 February, Mr Mitchell had done calculations comparing the earnings of a contractor vis-à-vis those of an employee.

Mr Mitchell's belief that he was an employee is nothing more than a colourful rationalisation, created to suit his own circumstances. According to the evidence, Mr Mitchell came to believe he was an employee only after receiving his solicitor's advice on 2 February 1998.91 At no stage before that date did he ever suggest to P & O that he was an employee or that he wanted the Company to deduct PAYE tax. The clear inference available from his actions before then is that he believed he was an independent contractor.

Mr Mitchell's evidence is that he thought he was an employee until he signed a contract to the contrary.92 He also said P & O did not give him a copy of the proposed contract until 30 January 1998, some days after he commenced working for the Company.93 The evidence of witnesses Button and Bird, however, is that Mitchell and Jones each received a copy of the proposed contract on or about 22 January 1998-about the same time they received P & O uniforms.94 That document merely confirmed in writing, without any variation, the parties' initial oral arrangements.

The arrangements entered into by P & O and Mitchell and Jones were not a sham. The oral agreements reached between the Company and each individual reflected their intentions and the proposed written contracts merely confirmed those arrangements. There is no evidence suggesting that P & O attempted to impose contracts upon unwilling parties. All that is apparent from the evidence is that, on and after 5 February 1998, Mitchell and Jones wanted their engagement to be as employees rather than as independent contractors. The fact that Mitchell and Jones changed their minds does not make sham arrangements of the contracts they had with P & O. This is not a case in which the parties subsequently altered the truth of their relationships.

(2) The Control Test

The Courts now recognise that the control test is no longer the absolute criterion for determining whether the nature of a particular contractual relationship is one of employer and employee or principal and independent contractor. The control test finds its classic expression in cases such as Performing Right Society, Limited v Mitchell and Booker (Palais De Danse) Limited [1924] 1KB 76, ie per McCardie J at p. 768:

"A master is one who not only prescribes to the workman the end of his work, but directs or at any moment may direct the means also, or, as it has been put, 'retains the power of controlling the work'. "

The courts over the years, in identifying unsatisfactory features of the test, made it clear that the search was not for actual control but for the ultimate authority to control.

In more recent times, however, the High Court in Stevens v Brodribb Sawmilling Company Proprietary Limited (1985-1986) 160 CLR 16 abolished any remaining predominance of the control test. In that case Mason J (p. 24) observed that:

"...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 ..."

It is also important to note that, in a somewhat earlier High Court case-Queensland Stations Pty Ltd v The Federal Commissioner of Taxation (1945) 70 CLR 539-Dixon J (p. 552) observed that "in considering the facts it is a mistake to treat as decisive a reservation of control" over the manner in which one person performs work for another.

In the present case, the facts are that P & O exercised no control. In the alternative, should the Commission find that the Company did exercise control, it was of such an inconsequential nature that the Commission should disregard it as misleading. That is because there is no evidence before the Commission tending to show that P & O exercised day-to-day control. To the contrary, all the evidence discloses is actions by a principal to coordinate contractors to ensure certain clearly identified outcomes. How the contractors went about achieving those outcomes was a matter for them. The principal's actions, in the circumstances, did not constitute control in any meaningful sense. Those actions, even if they remotely resembled control or coordination, did not operate to transform a principal and independent contractor relationship into one of employer and employee.

(3) The Multiple Criteria Test

Uniforms: The requirement for Mitchell and Jones to wear uniforms arose from obligations specified in P & O's contract with the Royal Hobart Hospital. A contractual obligation imposed by a third party is neutral in determining the nature of the relationship between P & O and Mitchell and Jones.

The ability to refuse work: Both Mitchell and Jones had the ability to refuse work, which they demonstrated by changing shifts when they worked for Coverall Security.95 Mr Jones also specifically acknowledged that he had the ability to reject work.96 The roster that each individual subsequently worked for P & O is not, in the circumstances, indicative one way or another of their status as independent contractors or employees. Mr Bird's evidence in this regard is that he developed the roster "just to initially get the ball rolling".97 The Commission, in determining the matter now before it, should regard the roster as neutral in effect.

Payment by invoice: Coverall Security made payments to Mitchell and Jones based on invoices submitted by them for services rendered.98 The same practice was to continue with P & O.99 Mitchell and Jones designed and printed their own invoices100 and neither objected to the practice. Neither Coverall Security nor P & O deducted PAYE tax instalments from payments made to Mitchell and Jones.101

Provision of equipment: In some industries, the provision of equipment by a contractor may be a pertinent issue. In other cases, eg the security industry, the nature of the industry itself may require little from a contractor by way of investment in capital equipment. On the facts of the present case, the evidence that Mitchell and Jones provided little, if any equipment, is a neutral feature as between the parties.

The ability to work for other employers: The evidence shows that Mitchell and Jones were able to work for other employers.102 As independent contractors and licensed security agents (as distinct from security guards) they were free to work for other employers and were told by Mrs Button that they could do so.103 Mitchell and Jones both registered business names and set up their own businesses. In doing so they had a capacity to generate profit or loss and to provide security services to other companies. How they structured their businesses and to whom they provided services was a matter for them alone.

Insurance: P & O did not provide workers' compensation insurance cover for Mitchell and Jones.104 The Company advised them to obtain their own insurance cover and Mitchell and Jones both actively pursued that objective.105

General Criteria: The arrangements between P & O and Mitchell and Jones did not provide for them to receive sick leave and annual leave benefits.106 Other elements of the parties' arrangements that indicate a relationship of principal and independent contractor appear in the document entitled "Subcontractor's Agreement".107 Those elements pertain to, for example, unavailability, termination of arrangements and responsibility for damage and neglect. All those matters, including the more specific criteria already mentioned, appear clearly in the Company's proposed contract and demonstrate that the arrangements were anything but a sham.

(3) The Security Industry Award

P & O accepts without reservation that, should the Commission find Mitchell and Jones were employees, the relevant industrial instrument would be the Security Industry Award. In the event that the Security Industry Award has application, the Commission must then determine whether Mitchell and Jones were casual, part-time or full-time employees.

The evidence is that they accrued no sick leave or annual leave and were not paid for public holidays on which they did not work. There is no evidence that Mitchell and Jones were other than casual employees whom P & O engaged as and when required. In the circumstances, since the award makes provision for casual employees, there was no termination by P & O of Mitchell's and Jones' employment. Simply put, there was merely a failure by P & O to offer them further work. Accordingly, if the Commission finds Mitchell and Jones were casual employees, it should dismiss the applications.

However, the Commission might want to find that Mitchell and Jones were permanent employees, ie part-time or full-time employees. In that event, the Commission must also determine whether they were probationary employees. Clause 25 of the Award, which deals with probationary employment, provides among other things that:

"(a) A permanent employee shall be initially employed for a probationary period of four weeks from the date of commencement."

The Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 contains a similar provision, except that the period of probation is three months.108 In both cases, however, the provision is mandatory rather than discretionary. That is to say, a period of compulsory probation from the time of initial engagement flows from either the Award or the Agreement itself and not from anything the parties might do or say.

At the point in time when Mitchell and Jones ceased working for P & O they were both still within their periods of probationary employment, irrespective of whether coverage flowed from the Award or the Agreement. It would be wrong to suggest that, because Mitchell's and Jones' service with Security Resources, Coverall Security and P & O was continuous, the probationary period should not apply. Service is pertinent to each employer. It would be unreasonable and manifestly incorrect to require an employer to engage a new employee, even one previously engaged in the security and watching industry, without retaining an ability to assess the employee during a period of probation. In the circumstances, the Commission should dismiss the applications.

Findings

I commence my consideration of this issue by observing that neither party suggested the relationship that existed between Mr Mitchell and Mr Jones and Security Resources was other than one of employer and employee in each case. Both individuals, therefore, were employees when, on Saturday, 6 December 1997, P & O advertised its intention to "seek to engage 8 professional security officers".109 The evidence also discloses that neither Mr Mitchell nor Mr Jones had any previous experience in working as contractors.110

In the particular advertisement, which appeared in the "Positions Vacant" column of "The Mercury" newspaper of 6 December, P & O described itself as "an equal opportunity employer". After detailing proposed rosters of 12 hour rotating shifts and average weekly hours ranging from 36-42 hours with "the opportunity of overtime", the advertisement went on to invite applications for the eight positions.111

On or about 8 December 1997, Mr Mitchell and Mr Jones each applied for one of the positions advertised by P & O.112 Mr Mitchell's evidence is that he believed he was applying for a position of employment with P & O-a belief he said he maintained until he received P & O's letter of 24 December 1997 accepting his "tendered rate of $14.50 per hour to provide security services at the Royal Hobart Hospital".113 Mr Jones' evidence, while differently expressed, nevertheless comes down to a similar understanding. He said he never tendered a rate of pay for security work at the Hospital114 and never understood from P & O's advertisement that he was applying for a job as a contractor or sub-contractor.115

I conclude from this evidence that when Mitchell and Jones each applied for one of the advertised positions with P & O, they both believed they were applying for positions of employment with the Company, as distinct from seeking to become contractors. The reasonableness of that belief, it seems to me, draws support from the evidence of witness Button. Mrs Button conceded that, with the benefit of hindsight, the positioning of P & O's advertisement in the "Positions Vacant" column of the newspaper coupled with the Company's description of itself as an equal opportunity employer "would possibly look like an employment advertisement".116 By way of explanation Mrs Button added that, at the particular time, she was not clear on how she was going to handle the contract.117 To this evidence I would also add that of Mitchell and Jones themselves, ie their work experience was only as employees, they were employees at the time they responded to P & O's advertisement, and neither of them had any experience in working as a contractor.118

According to Mitchell and Jones, Mrs Button first interviewed them in relation to their job applications on 11 December 1997.119 Mrs Button's evidence is that she did not then explain to Mitchell and Jones that the Company's offers concerned work as contractors rather than as employees.120 However, her further evidence is that she did convey that information to the applicants during the second interviews of 15 December 1997.121 At those meetings, at which Mr Bird was also present and whose evidence confirms that of witness Button,122 Mrs Button said she explained to both Mr Mitchell and Mr Jones that P & O "was not going to be employing people but we were offering contracts to provide the security service at the Royal Hobart Hospital".123 According to Mrs Button, she also explained the differences between the two types of engagement, advised Mitchell and Jones that they would need to obtain certain licences and insurances and register business names, and offered a contract rate of $14 per hour.124

Mr Mitchell's evidence of what relevantly occurred at his interview on 15 December is that the Company's agents told him he would "have to look at getting business registration";125 that P & O would engage him "as a business";126 that he would need to "change my licence over";127 and that he would need to get insurance "later down the track".128 At all times during the course of his evidence, however, Mr Mitchell denied that P & O's agents told him the Company would only engage him as an independent contractor.129 He also asserted that nothing was put to him during the interview about the question of taxation.130

With one exception, Mr Jones' relevant recollections of his interview of the same day are essentially the same as those of Mr Mitchell, including the latter's denial that P & O told him the Company would only engage him as an independent contractor.131 However, Mr Jones did recall the Company's agents telling him about issues concerning taxation.132

I pause here to deal with the question of witness credibility. Concerning what was said, or not said, by the Company's agents to Mitchell and Jones at the interviews of 15 December, there is a clear conflict in the evidence as between, on the one hand, Button and Bird and, on the other hand, Mitchell and Jones. Concerning such conflicts-there were many-Mr Gates submitted that I should prefer the evidence of witnesses Button and Bird because their evidence and recollections were clear, forthright and entirely consistent.133 The evidence of Mitchell and Jones, he suggested, lacked an exactness of recollection and, in some circumstances, contradicted their affidavit evidence.

I do not disagree with Mr Gates' description of the evidentiary qualities of his witnesses or of the cognitive failures of Mitchell and Jones. However, my impression of all the primary witnesses-Mitchell, Jones and Button-was that each took considerable care to present his or her evidence in a manner calculated to best serve that individual's particular interest. The evidence of those witnesses, in my opinion, lacked impartiality because of a strong self-interest motivation. Mr Bird's evidence, I thought, was much more candid and therefore more reliable, even though he too arguably had an interest in promoting the views of his then principals.

In the circumstances I believe that, among the primary witnesses, there is nothing to distinguish the oral evidence of one witness from that of another. Accordingly, because of the self-serving nature of much of that evidence, I propose to look for and take into account, in coming to my conclusions, such objective evidence as might flow from relevant surrounding circumstances.

With that approach in mind, I now return to the interviews of 15 December 1997 and the evidentiary conflict there disclosed. The outcome of those interviews is helpful. Mr Mitchell's evidence is that he never questioned why P & O wanted him to set up a business. He said he "had to take paperwork away and look into it".134 Those papers, evidently, did not include a copy of the proposed contract.135 Mr Mitchell's impression, however, was that because P & O offered to pay the costs he incurred in setting up a business, he would be an employee.136

Mr Jones' evidence is that he did not clarify P & O's requirements at the interview of 15 December 1997, explaining that "we had nothing else to go with so we then waited and asked about some more paperwork which came to us on 24 [December]".137 The paperwork to which Mr Jones referred was not the proposed contract but P & O's letter of 24 December 1997. Mr Jones said that, pending clarification, he understood P & O was offering him full-time employment.138

Mrs Button, in her evidence, acknowledged that, at the 15 December interviews, Mitchell and Jones did not accept the offered rate of $14 per hour, but went away to think about it.139 The possible inference in this evidence, because it focuses only on the offered hourly rate, is that Mrs Button may have held the view that Mitchell and Jones had accepted, at least in principle, the notion of engagement as contractors rather than as employees. Mr Bird's evidence on the issue, however, is that Mitchell and Jones "still showed interest and made it quite clear that they weren't going to make a decision then and there and that they were going to go away and make some inquiries."140

I have set out the above evidence in some detail because it establishes beyond doubt, in my mind, the framework in which the parties' negotiations commenced and were to continue for the next few weeks. At the end of the 15 December 1997 interviews, irrespective of what Mrs Button may or may not have said about what P & O was offering, the respective positions of the parties is very clear. Mitchell and Jones were seeking employment contracts, whereas P & O was offering engagement as independent contractors. There was no meeting of minds on those issues and negotiations were continuing.

In that regard, if it was witness Button's intention to infer that Mitchell and Jones had each given some in principle commitment to accepting engagement as contractors, then I reject the inference. The best evidence on the issue, I believe, is that of witness Bird. He recalled that Mitchell and Jones showed interest in P & O's offer, but declined to take a decision because they wanted to make further inquiries. I accept Mr Bird's evidence.

In the circumstances, there is no need for me to attempt to resolve the apparent evidentiary conflict referred to earlier, since to do so does not assist in determining the status of Mitchell and Jones when they ultimately agreed to work for P & O.

According to the evidence, the parties' negotiations then centred around the monetary part of P & O's offer. After the interviews of 15 December, Mitchell and Jones discussed P & O's proposal with others to whom the Company had made a similar offer. They apparently all decided P & O's offer was not good enough.141 Mitchell and Jones subsequently contacted Mr Bird and told him of their decision.142 Mitchell and Jones said they also told Mr Bird of their concern about "this business of a contract" and the fact that they had not received a copy of the proposed document. According to Mitchell and Jones, Mr Bird apparently told them he would see if he could "get things fixed".143 Mr Bird's evidence, however, is that Mitchell and Jones "suggested to me that $14.50 would be the appropriate figure and I suggested that I would then just pass that information on to Robyn [Mrs Button], which I did".144

In her evidence on this issue Mrs Button mentioned that P & O's $14 hourly rate offer changed "at a later date when they [Mitchell and Jones] accepted the contract". According to Mrs Button, after the interviews of 15 December, Mitchell and Jones considered their options and, towards the end of the week, "came back with an alternative rate of $14.50 an hour which I then accepted".145

There is an abundance of conflict and ambiguity apparent in the parties' evidence as recorded above. In the first place, what did Mrs Button mean when she said that Mitchell and Jones "accepted the contract"? Clearly, the witness was not referring to any written document because at no time during the course of their negotiations did the parties ever execute formal memoranda of agreement. Most likely, it seems to me, Mrs Button believed P & O had an oral contract as evidenced by Mitchell and Jones' alleged tender of $14.50 per hour, which the witness said she accepted. But, of course, the evidence of Mitchell and Jones is that, Mr Bird's evidence to the contrary, they never made any such offer.

The only possible way of reconciling these apparently conflicting evidentiary statements is to have recourse to the general thrust of Mitchell and Jones' entire evidence. That is to say, even though they acknowledged being told about insurance, agents' licences, business registration and, in the case of Jones, tax,146 the weight of the evidence, which I accept, is that they nevertheless continued negotiations on the basis of seeking employment rather than engagement as independent contractors. They did so, according to their evidence, until 24 December, when P & 0's letter of the same date made it abundantly clear that the Company's offer was not one of employment but one of engagement as contractors.

In the circumstances-again relying on the more believable evidence of witness Bird-it is most likely, I think, that Mitchell and Jones had some direct hand in the $14.50 negotiations and, their denial to the contrary,147 indicated to P & O a preparedness to work for that hourly rate albeit, in their minds, as employees rather than contractors. This conclusion draws support from the fact that Mitchell and Jones did not express a willingness to look at being contractors until after 24 December 1997.148 If, therefore, Mitchell and Jones did so conduct themselves, it becomes immediately understandable why Mrs Button believed she received from them an offer to work for $14.50 per hour.

Having regard to all the evidence and the above considerations I have come to the conclusion that, most likely, Mitchell and Jones, at the time, did make some kind of offer to work for P & O at $14.50 per hour, but only as employees. Mrs Button's acceptance of that offer, however, was mistaken to the extent that she believed it to be an offer to work as contractors. On my understanding of the evidence, the parties were simply at cross-purposes with each other, particularly up to 24 December 1997. As I have already mentioned, Mitchell and Jones were seeking employment contracts, whereas P & O was offering engagement as independent contractors.149

Following receipt of P & O's letter of 24 December 1997, Mitchell and Jones both acknowledged their awareness that the Company was interested only in engaging them as independent contractors.150 Mitchell and Jones each rang Mrs Button to express, among other things, surprise at receiving such a letter since they believed they never tendered for contract work. They also asked her for a copy of P & O's proposed contract.151 Mrs Button acknowledged Mr Jones' telephone call, but said she could not recall having such a discussion with Mr Mitchell.152 Mrs Button also acknowledged that, on several occasions after 24 December, Mitchell and Jones asked her for copies of the proposed contract.153

The desire of Mitchell and Jones to examine P & O's proposed contract marks an important change of attitude on their part. The evidence shows that, about this time, Mr Mitchell told Mr Bird of his interest in becoming a contractor provided that, in doing so, he was going to be better off.154 Mr Jones' evidence is that, on 24 December, he asked Mrs Button for a copy of the contract "to look at".155 Previously, both Mitchell and Jones had expressed concern to Mr Bird about the proposal, but they evidently did not then offer to consider its merits.156

Other activities of Mitchell and Jones following 24 December 1997 are indicative of their changed attitudes. Mr Mitchell registered a business name on or about 17 January 1998;157 about 18 or 20 January, he started looking around for insurance cover;158 and, sometime before 26 January, he applied for and obtained a security agent's licence.159 Mr Jones, for his part, registered a business name and inquired about insurance during January 1998.160

From 24 December 1997 to 26 January 1998 Mitchell and Jones worked for Coverall Security. During that period they continued to work at the Royal Hobart Hospital performing the same duties and working the same shift rosters as they had done when employed by Security Resources.161 Both individuals, while so engaged, thought of themselves as employees even though they accrued no sick leave, annual leave or entitlement to public holidays and, at Mr Bird's direction, lodged invoices for services rendered on a regular basis.162 Mr Bird's evidence is that he engaged Mitchell and Jones as contractors.163 Fortunately, perhaps, the present proceedings do not require me to determine this issue. However, the question is not one free from doubt in Mr Mitchell's case at least since, according to him, for part of the period concerned, he "was only on a guard's licence. To work on a guard's licence you can only be employed."164

The relevance for present purposes of Mitchell and Jones' period of engagement with Coverall Security lies in the fact that, rightly or wrongly as a matter of law, they believed they were employees. That impression, according to the evidence, was a belief that Mitchell and Jones held consistently throughout the entire course of their negotiations with P & O.165

On 19 January, according to Mr Mitchell, he received advice that P & O was officially taking over security arrangements at the Royal Hobart Hospital. Mr Mitchell also received that day, from Mrs Button, a P & O uniform.166 Mr Jones, too, received a uniform and the same advice, but on 22 January 1998.167 However, he was also told, apparently by Mr Bird, that it would be necessary for him to start wearing the uniform on 26 January.168

On 23 January 1998 Mr Mitchell, who said Mr Jones accompanied him at the time, spoke to Mr Bird expressing disquiet about the fact that he had heard nothing from P & O about their contractual arrangements. In particular, Mr Mitchell told Mr Bird he had still not seen a copy of the proposed contract.169 Mr Jones apparently expressed similar sentiments. However, he could not be certain whether he was with Mr Mitchell when the latter spoke to Mr Bird.170

Despite this abundance of uncertainty, Mitchell and Jones both began working for P & O on 26 January 1998.171 On 30 January, according to Mitchell and Jones, they finally received a copy of P & O's proposed contract.172 Mrs Button's evidence, on the other hand, is that, along with some extra uniforms, she personally gave the contract documents to Mitchell and Jones on 22 January.173

Because the evidentiary conflict on this issue is irreconcilable, it is with a sigh of relief that I find I do not need to take the particular matter any further. In my opinion, nothing rests on whether Mitchell and Jones received the contract documents on either 22 or 30 January. That is because neither individual ever consented, then or later, to becoming a contractor on those terms. What they wanted to do, as I see the thrust of their evidence and to paraphrase the words of both Mitchell and Jones, was to look at the document to see if they would be better off.174

In any event, P & O, through Mrs Button, did not expect Mitchell and Jones to immediately give their imprimatur to the proposed agreements. Importantly, in this context, Mrs Button's evidence is that she "gave them the document to take away and read, seek advice before signing".175

On 2 February 1998, after jointly discussing the matter, Mitchell and Jones decided that Mitchell would obtain legal advice from a solicitor and advice from their Union (the applicant organisation in these proceedings) concerning P & O's proposed contracts. Indeed, Mr Mitchell took those steps the very same day.176 The evidence shows that both the solicitor and the Union advised Mitchell and Jones not to sign the contracts as offered.177

After discussing the matter on 3 February with Mr Jones and other security guards employed at the Hospital, Mr Mitchell said he met Mrs Button on 4 February at P & O's Moonah office. At that meeting Mr Mitchell said he told Mrs Button of the advice given he and Jones by the solicitor and the Union.178 Mr Jones said he gave Mrs Button the same advice by way of a telephone call, also on 4 February.179 Both individuals said that Mrs Button told them there would be a meeting at her office the following day to discuss the matter.180 Mrs Button's evidence confirmed the meeting arrangements, although there was some difference of opinion between the witnesses-not relevant to the present discussion-as to the reason for the meeting and who actually did the arranging.181

Mr Mitchell attended the meeting of 5 February, initially without the company of Mr Jones. In addition to he and Mrs Button, Mr Bird was also present. Mr Mitchell's evidence is that, after about 45 minutes, he asked Mr Jones to join the discussion.182 According to Mr Jones, Mitchell told him he was having problems.183 After some further 15 to 30 minutes discussion, Mr Mitchell formed the view that he and Jones were making no progress. He apparently then told Mrs Button that he would not sign P & O's contract in its present form.184 Having said that, Mitchell's evidence is that he put a draft copy of a proposed enterprise agreement to Mrs Button. Mitchell, who said he, Jones and other P & O employees believed an enterprise agreement was the only fair way to go, asked Mrs Button to negotiate such an agreement instead of a contract. The agreement proposed was one similar to that under which Mitchell and Jones had worked for Security Resources.185 According to Mitchell and Jones, the parties apparently discussed the draft agreement for, perhaps, an hour in total but could not reach agreement.186

Mrs Button's view of these events is somewhat different. Her recollection is that Mr Mitchell said he would not sign the contract at all. Mrs Button also denied participating in any negotiations concerning an enterprise agreement, saying she would not look at the document because P & O was not offering employment.187

Mr Bird's evidence tends to confirm that of Mrs Button regarding Mr Mitchell's refusal to sign P & O's contract.188 As to the proposed enterprise agreement, he recalled that Mitchell provided the meeting with a copy of such a document. However, his evidence does not disclose whether it was the subject of any discussion.189

Whatever the parties actually said or did at the 5 February meeting, it is enough for present purposes to note the one point of consensus among the witnesses: that there was no agreement between the parties regarding either P & O's proposed contract or Mitchell and Jones' proposed enterprise agreement. Mr Mitchell's evidence, confirmed by witnesses Jones and Button, is that, at this point in time, he left the meeting. The circumstances of his leaving, like so much of the evidence in this case, are a matter of serious contest between the parties. However, I need not consider that issue here. Mr Jones evidently left the meeting as well but then returned at P & O's request and continued to discuss the proposed contract.190 He, too, finally left the meeting without having reached any agreement with Mrs Button.191

There then followed, about noon the same day, the unsuccessful attempt by Mrs Button and Mr Bird to settle the matter.192 Later still, about mid-afternoon, Mitchell and Jones' employment or contractual arrangements with P & O-whichever they were-came to an end.193 The method of that ending is another matter of substantial evidentiary conflict. All I need say here, however, is that when the parties concluded negotiations and brought their arrangements to an end, about mid-afternoon on 5 February 1998, there was no acceptance by either Mitchell or Jones of P & O's offer of engagement as contractors.

Here, at last, I am able to leave this long recital of the evidence surrounding the parties' negotiations. My analysis is admittedly extensive. It is only so, however, because the abundance of evidentiary conflict made it imperative that I should attempt to obtain an overall appreciation of the substance of the parties' relationships, as to their conduct, in order to better weigh the evidence from an objective point of view.

That substance, in my view, reflects in the following summary:

  • I am satisfied that Mitchell and Jones believed they were applying for positions of employment-as distinct from seeking to become contractors-when they responded to P & O's newspaper advertisements of 6 December 1997.194

  • I am satisfied that, at the end of the 15 December 1997 interviews, irrespective of what Mrs Button may or may not have said about the nature of P & O's offer, Mitchell and Jones were seeking employment contracts, whereas P & O was offering engagement as independent contractors.195

  • I am satisfied that Mitchell and Jones, even though they acknowledged P & O told them about insurance, agent's licences, business registration and tax (in the case of Jones), they nevertheless continued negotiations until 24 December 1997 on the basis of seeking employment rather than engagement as independent contractors.196

  • It is most likely, in my opinion, that Mitchell and Jones did make some kind of offer to work for P & O at $14.50 per hour, but only as employees. Mrs Button's acceptance of that offer was mistaken to the extent she believed it to be an offer to work as contractors.197

  • I am satisfied that, following receipt of P & O's letter of 24 December 1997, Mitchell and Jones changed their attitude towards the proposed contract in that they expressed interest in becoming contractors and took certain steps towards that end. Mitchell conditioned his interest to seeing if he would be better off.198

  • I am satisfied that, notwithstanding their changed attitude, Mitchell and Jones continued to believe they were employees, first with Coverall Security and then with P & O, and that, rightly or wrongly as a matter of law, they held that view throughout the entire course of their negotiations with P & O.199

  • I am satisfied that, irrespective of whether Mitchell and Jones received P & O's contract documents on either 22 or 30 January 1998, neither of them ever consented, then or later, to becoming a contractor on those terms. Mrs Button gave them draft documents on one or other of those days, advising Mitchell and Jones to take the papers away, read them, and seek advice before signing the contracts.200

  • I am satisfied that when Mitchell and Jones' employment or contractual arrangements with P & O-whichever they were-came to an end on 5 February 1998, there was no acceptance by them of P & O's offer of engagement as contractors.201

Keeping the above findings in mind, I now turn to the question of whether Mitchell and Jones were, in all the circumstances and in relation to P & O, employees or independent contractors. The parties' agents, particularly Mr Tullgren, gave me the benefit of an exhaustive analysis of the criteria and indicea used by the courts in determining questions of this nature. In the end, as both Mr Tullgren and Mr Gates suggested, I think the exercise is one that comes down to a matter of balancing the evidence202 having regard to, as Mr Gates submitted,203 the principal areas of decided authority.

I begin with the parties' intentions. It is clear that P & O always intended to achieve a principal and contractor relationship with Mitchell and Jones. It is equally clear that Mitchell and Jones began and ended their negotiations with P & O with the intention of seeking contracts of employment. During the course of those negotiations, for a period of time, they expressed an interest in a principal and contractor relationship provided, in Mitchell's words, they would be better off. They took advice and, having been told not to sign the offered contracts, reverted to their original aim of seeking contracts of employment.

Throughout the course of their negotiations with P & O, Mitchell and Jones believed they were employees, first with Coverall Security and then with P & O. They never expressed a contrary view and never executed any contractual document that indicated their acceptance of a principal and contractor relationship. As Mr Tullgren put it, there was simply no agreement at all.204

Mitchell and Jones certainly knew of P & O's requirements regarding business arrangements, insurance, invoicing, tax obligations and licensing requirements. Indeed, they took some steps towards meeting those demands. However, I do not accept that that knowledge and those actions, in the circumstances of this case, expressed acceptance of a contractor and principal relationship with P & O. Mitchell and Jones took those steps at a particular point in the negotiations, I believe, simply in order to move matters along-and to be paid in the case of invoicing-while, in the meantime, they looked at the proposed contracts to see if they would be better off.

If there was an agreement between the parties concerning the $14.50 hourly rate-I think there was-then that was the extent of the agreement. For reasons already advanced, I believe Mitchell and Jones offered to work for that rate, but only as employees. Mrs Button accepted the offer but, in my view, only in the mistaken belief that it signified Mitchell and Jones' acceptance of a contractor and principal than the previously agreed $14.50 rate. That activity, it seems to me, was a last ditch effort on their part to encourage P & O to offer contracts of employment-the objective they sought throughout the course of their negotiations. There is nothing in those actions, as they appear to me, that is capable of supporting P & O's contention that, by so negotiating, Mitchell thereby acknowledged he was a contractor and not an employee.205

For the above reasons, I do not accept P & O's contention that the conduct of Mitchell and Jones following 15 December 1997, viewed in its entirety, evidenced an intention on their part to create relationships of contractor and principal with P & O.206

I turn now to the issue of control. I accept Mr Gates' submission that control, while significant, is not the sole criterion by which to gauge whether a relationship is one of employment.207 That said, I note there was no dispute between the parties that P & O required Mitchell and Jones to wear uniforms and to work 36-42 hours per week by way of rotating 12-hour shift rosters, including some night work, set up by Mr Bird on the Company's behalf.

Another aspect of the debate before me on the matter of control was whether Mitchell and Jones retained a capacity, while working for P & O, to work for other parties. Mrs Button's evidence on the point is quite unequivocal, ie "once they were contractors for us they would have the opportunity to work for other firms as long as it didn't interfere with the work that they would be doing for P & O".208 In my opinion, the condition that Mrs Button placed on the freedom of Mitchell and Jones to work for other employers, ie "as long as it didn't interfere with the work that they would be doing for P & O" unmistakably asserts a measure of control that appears to be quite inconsistent with the independence of an "independent" contractor.

The evidence also discloses that P & O required both individuals to work rotating 12-hour shift rosters, including some night work and some overtime to a total of 36-42 hours per week. In the circumstances, it seems to me that the capacity of either Mitchell or Jones to work for another party, assuming they actually had that capacity, was more illusory than real. Certainly, it is difficult to see how they could reasonably have done so and, at the same time, complied with Mrs Button's condition that such activities should not interfere with the work required of them by P & O.

Looking at the evidence as a whole, I draw the following conclusions regarding the question of control:

  • P & O determined the nature of the shifts-"12 hour shifts 2 on 2 off, on a rotating roster"-and the average weekly hours-"36-42" that Mitchell and Jones worked.209

  • P & O, through Mr Bird, fixed the shift rosters worked by Mitchell and Jones without consulting either of them.210

  • P & O, on the evidence of Mrs Button, required Mitchell and Jones to effectively give priority to the Company's work, ie as long as any other work they might choose to do "didn't interfere with the work that they would be doing for P & O".211

  • It is arguable that P & O, through Mr Bird, effectively supervised the manner in which Mitchell and Jones performed their work by directing them not to deal with the Hospital but to report problems to Mr Bird, who would, if required, "make arrangements to sit down with the hospital management and discuss them".212

  • P & O required Mitchell and Jones to wear the Company's uniform.213

The above indicea when considered as a whole, in my opinion, disclose the presence of a degree of control more usually associated with an employer and employee relationship rather than a relationship of contractor and principal. In the circumstances, I find that the evidence does not support P & O's contentions that the Company exercised no control or, if it did, that control was of an inconsequential nature.214

I turn now to the issues raised by P & O in relation to the multiple criteria test.215

Uniforms: The Hospital's contractual specifications, so far as they were disclosed to me, obliged P & O to "ensure that all employees engaged in the provision of this service are outfitted in an appropriate uniform ...".216 I agree with Mr Gates that, on its own, such a requirement does not indicate, one way or another, the nature of the relationship between P & O and Mitchell and Jones. However, as I observed earlier, when P & O's compliance with that obligation, in the form of a requirement on Mitchell and Jones to wear the Company's uniform, appears in the same context as other, perhaps more specific instances of P & O control, it assumes, in my opinion, a less than neutral aspect.217 In the circumstances, I reject Mr Gates' submission that I should regard P & O's requirement of Mitchell and Jones to wear the Company's uniform as neutral in determining the relationship that existed between P & O and the two individuals.

The ability to refuse work: As a matter of common knowledge, in my experience, it is a widespread and tolerated practice for shift workers to change shifts with one another. The mere fact that Mitchell and Jones indulged in such a practice when they worked for Coverall Security does not, in my opinion, necessarily demonstrate knowledge of an ability to refuse work as connoted by a principal and contractor relationship.

I accept the evidence that Mr Jones specifically acknowledged, in relation to Coverall Security, that he had the ability to reject the work. However, the context of Mr Jones' remark does not appear to me to be that of principal and contractor. Rather, the context appears to be that of employer and employee, since Mr Jones, at the time, believed he would be an employee because Mr Bird asked him to perform some duties of an unclear nature at the Hospital.218 In any event, even if Mr Jones' acknowledgment has the meaning for which Mr Gates argued, the evidence at its highest, in my view, is insubstantial when viewed in the light of all the facts and circumstances of this case.

Concerning Mr Bird's actions in fixing the shift rosters that Mitchell and Jones were to work for P & O, my earlier conclusion is that those actions arguably demonstrated a degree of control that, it seems to me, was more consistent with an employer and employee relationship than a relationship of principal and contractor.219 When viewed with other aspects of control that existed in the relationship between P & O and Mitchell and Jones, Mr Bird's actions assume, in my opinion, a less than neutral aspect.

Payment by invoice: The evidence discloses that neither Mitchell nor Jones submitted invoices for services rendered to P & O as a practice incidental to the conduct of their own businesses. In fact it is quite clear, as I see the evidence, that Mitchell and Jones only pursued that practice because P & O demanded it of them, making it clear that, unless they did so, they would not be paid.220 The reason P & O took that approach, of course, is because of Mrs Button's mistaken belief that she had accepted offers from Mitchell and Jones to work as independent contractors.221 In all the circumstances, the absence of any objection on the part of Mitchell and Jones appears to be quite understandable. In my opinion the invoice evidence, as I shall call it, does not assist P & O's contention that Mitchell and Jones were independent contractors.

Provision of equipment: The evidence on this issue, at best, is very thin. It may be arguable, as Mr Gates submitted, that the nature of the security industry is such that very little is required of a prospective contractor by way of investment in equipment. However, in the absence of any conclusive evidence on the point, I am of the view that the limited range of equipment provided by Mitchell and Jones-shoes, webbing and paper-adds little, if any, support to P & O's contention that the particular individuals were contractors rather than employees. When weighed against the fact that P & O provided the uniforms, the work site and all other equipment, it seems to me that the application of this criterion tends to indicate the presence of an employer and employee relationship rather than one of principal and contractor.

The ability to work for other employers: This criterion, in the form expressed in the present case, harbours a dichotomy that, in some instances, was not always clearly distinguished in the evidence and in the parties' submissions.

If, on one hand, "the ability to work for other employers" means just that and nothing more,222 then the mere fact that Mitchell and Jones had a capacity to work for other employers, however illusory that capacity may have been,223 does not seem to assist either party in the present circumstances. That is because, in my opinion and as matter of general knowledge, both employees and contractors may work for more than one employer (or principal in the case of a contractor).

On the other hand, "the ability to work for other employers" may connote an ability in Mitchell and Jones to delegate to others the work they performed for P & O. If that is the case, then there is no evidence before me that is capable of supporting such a contention in a manner that favours P & O. Such evidence as there is tends to suggest that, during the brief period they worked for P & O Mitchell and Jones were bound to provide personal services, including overtime, according to the weekly rotating shifts for which they were rostered. It is true of course, as I have already mentioned, that Mitchell and Jones enjoyed an ability, like many shift workers, to change shifts with one another.224 I do not agree, however, that such a practice connotes a relationship of principal and contractor. The evidence in relation to this criterion, in my opinion, tends to favour the presence of an employer and employee relationship.

Insurance: In my opinion, Mitchell and Jones only "actively pursued" insurance cover at the time during their negotiations with P & O when they had expressed a conditional interest in a principal and contractor relationship.225 They did so, as I see the evidence, for the purpose of pursuing their negotiations with P & O rather than because of any need that arose as a consequence of the individuals being in business on their own account. Nevertheless, the fact that they took that action, together with the absence of workers' compensation insurance coverage by P & O, tends to indicate the presence of a principal and contractor relationship.

There are, however, contrary indications. There is the evidence of Mitchell and Button that P & O offered to reimburse each individual for public liability insurance-admittedly by increasing the hourly rate-and, in Mr Mitchell's case, the change from a guard's licence to a security agent's licence. 226 Then, too, there is the further evidence of Mrs Button. It was, apparently, standard Company procedure for P & O to require contractors to provide copies of public liability insurance and workers' compensation insurance cover, agent's licences and business registration. However, Mrs Button did not press the insurance covers with Mitchell and Jones because she started them at work on 26 January 1998, even though she was still waiting to receive the particular copy documents.227 Indeed, the evidence shows that, while both individuals made certain inquiries, Mr Mitchell never took out the required insurance covers.228 Whether Mr Jones actually obtained such cover is not clear. These factors, in my opinion, tend to indicate an employer and employee relationship.

In the circumstances of this case, in my opinion, the evidence regarding insurance coverage is neutral as to whether there existed a principal and contractor or an employer and employee relationship between P & O and Mitchell and Jones.

General criteria: I regard the fact that the arrangements between P & O and Mitchell and Jones did not provide for annual leave or sick leave as being equally indicative of either an employer and employee relationship or a relationship of principal and contractor. In the circumstances, I weigh this criterion as being neutral between P & O and Mitchell and Jones.

I accept that the absence of PAYE income tax deductions, on its own, suggests a relationship of principal and contractor. However, that element, in a case such as the present matter, must be viewed having regard to all the surrounding circumstances. In this case, if the criteria favours the Company's contentions, it does so only to a marginal degree.

Concerning the proposed "Subcontractor's Agreement" it is abundantly clear that the document and its content was the central focus of the parties' differences, that Mitchell and Jones never agreed to the document and, finally, neither individual ever executed the agreement. In such circumstances I cannot see how the content of the document, having never advanced beyond being an expression of the Company's intentions, helps P & O's contention that the Company's actual, as distinct from intended, relationship with Mitchell and Jones was one of principal and contractors.

Mr Gates also placed some weight on the "Contractor's Engagement Form" which he said both individuals completed.229 Mr Tullgren's tender of this document (Exhibit T5) was, ironically in the circumstances, the subject of objection by Mr Gates and subsequently only admitted by me to display the actions of Mrs Button in its preparation, but not as to its content. The Exhibit, accordingly, is of doubtful probity regarding the use Mr Gates subsequently sought to make of the material. But, because he chose to call on it in aid of P & O's case, I mention simply that Mr Jones did not sign the Form which, in any event and in my opinion, is at best nothing more than an authority to pay money into a bank account. I do not rely on this Exhibit in the findings that follow.

The elements of the multiple criteria test, as discussed above, when viewed as a whole in my opinion tend on balance to favour the existence of an employer and employee relationship between Mitchell and Jones and P & O, rather than a relationship of principal and contractor.

Taking into account the foregoing finding together with my earlier general findings;230 my finding that the conduct of Mitchell and Jones did not evidence an intention to create a principal and contractor relationship;231 and my finding that P & O exercised a degree of control over the work of Mitchell and Jones that is more usually associated with an employer and employee relationship;232 I am satisfied, on balance,233 that Mitchell and Jones, during the period they worked for P & O, were employees and not independent contractors. I mention in passing that, in reaching my conclusions and like Commissioner Imlach in Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch v Mr Robin Golley and Mrs Julie Golley trading as Swansea Cottages,234 I did not find it necessary to rely on the extensive range of tax authorities submitted to me by the applicant.

I now move on to consider the status of Mitchell and Jones in relation to the Security Industry Award. P & O conceded without reservation that, should the Commission find Mitchell and Jones were employees rather than independent contractors, the relevant industrial instrument would be the Security Industry Award.235 Having determined that Mitchell and Jones were, indeed, employees of P & O, it now falls to me to determine the nature of that employment having regard to the terms of the particular award.

P & O's primary position on this question is that Mitchell and Jones were casual employees of the kind provided for in Clause 10 - Casual Employment of the Award. In that regard the Company relied on the fact that neither employee received any annual leave or sick leave entitlements and did not benefit from paid public holidays.236

The undisputed evidence discloses that, after making an initial offer of a flat rate of $14.00 per hour, P & O employed Mitchell and Jones at a rate of $14.50 per hour. Mrs Button said she arrived at her initial estimate of the appropriate rate for the work by looking at:237

"...the base for the security industry which was $10 something, similar to our cleaning industry and I then took into account the public holidays, long service leave, holidays, all those costs and worked it up to a rate that I considered to be fair and reasonable..."

According to her evidence, Mrs Button later increased the rate to $14.50 per hour following representations by Mitchell and Jones.238

In the Award, Clause 8.1 - Wage Rates provides for five classification levels of Security Officer, ie Levels 1 to 5 inclusive, Level 5 being the highest such salary level. It is not clear from the evidence whether Level 1 or Level 2 was the appropriate classification for the work required of Mitchell and Jones by P & O. At the relevant time the weekly wage rate for Level 1 was $398.60 ($10.49 per hour) and, for Level 2, $413.70 ($10.89 per hour). I assume that Mrs Button, in referring to "the base for the security industry", was in fact adverting to the Level 1 rate rather than the Level 2 rate-although both rates fit her description of "$10 something".

Clause 8.2 - Hourly Wage Rates provides an hourly wage rate for casual employees of 3.158 per cent of the relevant classification Level specified in Clause 8.1. In the present case, for Level 1, the hourly rate, calculated as per Clause 8.2, would have been $12.59 and, for Level 2, $13.06. It is clear, therefore, that the rate actually paid by P & O-$14.50 per hour-exceeded the minimum required by the Award for a casual employee, irrespective of whether the appropriate classification was either Level 1 or Level 2.

It is obvious from Mrs Button's evidence that the $14.50 hourly rate included provision for entitlements normally associated with casual employment, ie payment in lieu of annual leave, sick leave and public holidays. Arguably against the notion of casual employment, however, is the evidence that Mitchell and Jones, while employed by P & O, worked a regular rotating 12-hour shift roster on a full-time basis.239 That period of employment, as already noted, extended from 26 January to 5 February 1998 inclusive-a total of 11 days.240 This evidence is especially relevant regarding Clause 7 - Definitions of the Award, which defines a casual employee in the following terms:

" 'Casual employee' - means a person who is employed on a casual basis and shall include any person employed for a period not exceeding five days at any one time."

Mrs Button's evidence makes it abundantly clear that P & O did not engage Mitchell and Jones on a casual basis. Indeed, her evidence is emphatically that P & O did not offer them employment of any kind, casual or otherwise-although the reality, as I have found, is that Mitchell and Jones actually were employees of P & O for the relevant period.241 In my opinion, in terms of the first part of the award definition of "casual employee", Mitchell and Jones were not persons employed on a casual basis because there is no evidence that P & O offered and Mitchell and Jones accepted a contract of employment of that nature. It is also relevant to note that, in terms of the second part of the award definition of "casual employee", neither Mitchell nor Jones were persons "employed for a period not exceeding five days at any one time". I say this because there is no suggestion in the evidence that P & O engaged Mitchell and Jones on a series of contracts, each of which did not exceed five days at any one time.

In all the circumstances I conclude that Mitchell and Jones were not casual employees, as asserted by P & O.

That finding begs the next question: What class of employees were Mitchell and Jones? They were clearly not part-time employees because, in terms of the relevant award definition, they were not employees "regularly engaged to work for less hours per day or week than those prescribed for full-time employees".242 Unfortunately, the Award is less helpful in defining what is meant by "full-time employees".

There was no dispute in these proceedings that P & O engaged Mitchell on a full-time basis, ie he worked regular rotating 12-hour shift rosters (two on and two off) for an average of 40-42 working hours per week.243 Mr Jones' evidence is silent on this point. However, there being no assertion to the contrary, I assume that he too worked similar shifts and similar average hours during his period of employment with P & O. In that light, having regard to the fact that Clause 17 - Hours of the Award prescribes that "the ordinary hours of work shall be an average of 38 per week...", I am prepared to conclude that Mitchell and Jones were full-time employees, as distinct from part-time employees of the kind provided for in Clause 7 of the Award.

In the event that the Commission should make such a finding, Mr Gates submitted in the alternative that, in any case, Mitchell and Jones were probationary employees by reason of Clause 25 - Probationary Employees of the Award.244

Once again, the Award is unhelpful. Clause 25 deals specifically with "a permanent employee", but nowhere in the Award is there to be found any guidance as to what constitutes such an employee. The thrust of Mr Gates' submission suggests that he equated "permanent employee" with "full-time employee". If in fact he did so, then I disagree with him. I do so on the basis that, on the clear facts of this case, Mitchell and Jones, whatever else they might have been, were most certainly not permanent employees. They were, according to my earlier finding, full-time employees-engaged as such, most likely I think, on as short term basis in anticipation by Mrs Button that they would each sign P & O's proposed contract. In any case, there is simply no evidence that suggests Mitchell and Jones' continued employment would have survived, as indeed it did not in the case of Mitchell, a final refusal by them to execute the relevant agreements.

Consequently, it must follow in my opinion that, while Mitchell and Jones were full-time employees, they were not "permanent employees" of the kind referred to in Clause 25. Accordingly, I reject P & O's submission to that effect.

Bringing together, in short form, my conclusions regarding the employment status of Mitchell and Jones during the period they worked for P & O, my findings are that they were not independent contractors but employees. As such, according to the Security Industry Award, they were neither casual nor permanent employees, but full-time employees engaged, most likely, for a short term in anticipation that they would each sign P & O's proposed contract.

The Alleged Resignation of Mr Mitchell

P Tullgren for the applicant:

Clause 6(a) of the Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997 provides that termination of employment shall be "as per the Award". Clause 12(a) of the Security Industry Award provides that:

"... employment shall be terminated by a week's notice by either party or by the forfeiture of a week's pay as the case may be in lieu of such notice."

In P & O's proposed contract, Clause 17 provides for termination by either party based on written notice. Mr Mitchell did not give notice under any of those provisions. Accordingly, he neither terminated his employment nor resigned.

There is no substance in the suggestion (if one is made) that, in the exchanges that took place between the parties during the meetings of 4 and 5 February 1998, Mr Mitchell repudiated his contract of employment. The law is that repudiation does not end a contract. There must also be an election by the employer, which it must communicate to the employee, to terminate the contract. There is no evidence in the present case that P & O took such action.

The evidence, to the contrary, is that the parties continued their negotiations. After Mr Mitchell allegedly resigned on 5 February,245 Mrs Button and Mr Bird left P & O's Moonah office and went to the Hospital.246 After a meeting with Mr Howard, they went to the Hospital's security room where they again met Mr Jones and Mr Mitchell. Mrs Button's evidence is that she and Mr Bird "went through it again ... verbally with David [Mitchell] and ... asked him if he wanted time to reconsider".247 There is no evidence that tends to suggest P & O treated Mr Mitchell as having ended his employment-they did not say to him, for example, words to effect that "you've resigned, what are you doing here" or "you've walked out and you're therefore not an employee".248

It is true that, in cross-examination, Mrs Button said she did not "agree with David Mitchell because he had already withdrawn his service".249 If that was the case then P & O should have told Mr Mitchell it was accepting the repudiation of his contract. However, the evidence clearly shows Mrs Button did not do that because she continued to negotiate with Mr Mitchell, thereby demonstrating that she did not accept his resignation.

Whichever termination provision applied to Mr Mitchell-agreement, award or contract-the evidence shows he did not activate it. Even if, as P & O's evidence suggests, Mr Mitchell made a statement about resigning, it was nothing more than an expression of possible intention that, on the facts, he did not subsequently carry into effect.

In the alternative, if Mr Mitchell did effect his own termination, then the surrounding circumstances are very relevant. He made his statement of resignation after an intense period of negotiation, having worked constantly for a number of days.250 Mr Mitchell's comment was, in essence, a response to negotiation with P & O for alterations to the proposed contract. Those circumstances do not, therefore, as a matter of discretion, preclude reinstatement.

There is conflicting evidence about whether P & O dismissed Mr Mitchell and Mr Jones by way of a telephone call. The manner of P & O's conduct at the hospital in relation to negotiations with Mr Mitchell and Mr Jones shows that the Company perceived a necessity to dismiss both individuals because they would not agree to the proposed contracts. In the circumstances, the evidence of both is more inherently believable than P & O's evidence to the contrary. Mr Mitchell's roster required him to work on the night of 5 February. However, P & O refused to allow him to return to work because it dismissed him by telephone. Mr Mitchell did not dismiss himself.

S Gates for the respondent:

The evidence of Mrs Button is that she did not dismiss Mr Mitchell. To the contrary, at the time in question he had already withdrawn his services by resigning, even if in fact he was an employee.251

Findings

I have already found that Mr Mitchell was a full-time employee engaged, most likely, for a short term in anticipation that he would sign P & O's proposed contract.252 He was therefore, in my opinion, a person who was capable of resigning his employment.

There is no doubt that Mr Mitchell left before the end of the first meeting of 5 February 1998 with Button, Bird and Jones.253 In fact, he did not deny that he walked out of the meeting. What is in dispute, however, is what he said when he took that action. His evidence is that "we'd worked all night, we worked the day previous...", the meeting "was sprung on us" and "we were basically stressed through work, so we just mentioned to Robyn [Mrs Button] and Colin [Mr Bird] that we quit the discussion for now...".254 Mr Jones' evidence is that he left the meeting at the same time but, at P & O's request, returned and continued discussions about P & O's contract offer.255 Of Mr Mitchell's departure, Mr Jones' recollection is that he (Mitchell) said "I've had enough" or words to effect that "I've had enough of this. I quit the meeting."256

Mrs Button's evidence makes no mention of Mr Jones leaving and returning to the meeting. Her recollections, however, do confirm that the meeting continued following Mr Mitchell's departure.257 As for Mr Mitchell, Mrs Button's evidence, unshaken by vigorous cross-examination, is that he left the meeting saying words similar to or in effect that "he wasn't signing anything", "I've had enough of this", "I'm out of here", I resign" and "I want nothing to do with this".258 Mrs Button also denied that Mr Mitchell's words were something like "I'm quitting negotiations at the moment".259 At the time Mrs Button said she assumed that Mr Mitchell was agitated and upset.260 However, at an earlier time in the course of her evidence Mrs Button conceded that, during the particular meeting, she too had become a little agitated261 but, at the time of Mr Mitchell's departure, she believed both of them had calmed down.262

Mr Bird's evidence, undiminished by cross-examination, is that Mr Mitchell said something along the lines of "I'm not signing this. I resign. I'm out of here". Mr Bird also expressed the view that, at that point in the meeting, "it was a fairly tense moment".263

The only reliable conclusions available from the above evidence, in my opinion, are the following. First, Mr Mitchell left the meeting abruptly at a time when, relying on the evidence of Button and Bird, feelings were evidently fairly tense. Second, Mr Mitchell took that action perhaps because, according to Mr Jones, he was having problems;264 he was tired,265 and he simply wanted to quit the meeting;266 or, according to witnesses Button and Bird, he resigned or said something along those lines.

After leaving the meeting with Mrs Button and Mr Bird, Mitchell and Jones each said they returned to the security office at the Hospital.267 Later the same day, about 12:45pm according to them, Button and Bird entered the security room. At the time Mrs Button allegedly announced an intention "to see if we can fix this thing".268 All the parties agreed that they did not succeed in achieving that outcome.

There is some evidence available from witness Button as to what occurred during that second meeting, as distinct from the meeting outcome. Such evidence as there is from Mitchell, Jones and Bird on this issue, however, is unhelpful regarding Mr Mitchell's status at the relevant time. Mrs Button, in her evidence, recalled that she and Mr Bird repeated the substance of the discussions held earlier that day and, concerning Mr Mitchell, asked him if he wanted to reconsider his position269 or sleep on it.270 Mr Mitchell, according to Mrs Button, repeated his refusal to sign the proposed contract and declined her offer to reconsider the matter.271

Later that afternoon, about 3:45pm according to Mitchell and Jones, Mrs Button told each of them individually by telephone that P & O no longer required them to fulfil their next shifts. At the same time, she also directed them to return their uniforms.272 For her part, Mrs Button's evidence-in-chief is that, after the failure of P & O's last minute effort to reach a settlement with Mitchell and Jones, she asked them to leave the security room, telling them they should not have been on the premises-Mitchell because he had withdrawn his services and Jones because he was not then rostered to work. Later on, after considering the events of the day, Mrs Button said she telephoned Mr Jones and told him P & O no longer required his services.273 In cross-examination, however, while confirming the telephone discussion with Mr Jones, Mrs Button said she had initially telephoned Mr Mitchell but, instead, got Mr Jones.274

What is one to make of this mass of conflicting and generally unsatisfactory evidence? The evidence of Mitchell, Jones and Button, as I have already said, tends to be unreliable because of its strong self-serving nature.275 It is clear, however, on the somewhat more reliable evidence of Mr Bird, that it was a fairly tense moment when Mr Mitchell left the first meeting of 5 February 1998. I accept that evidence which, in part, is supported by Mrs Button's admission that she, too, had become agitated during the meeting.276

I doubt, however, that the parties' relations were as calm as Mrs Button supposed them to be. To the contrary, I believe the discussions were heated and all the indications are that Mr Mitchell left the meeting in the heat of the moment. There is inferential support for that conclusion in the evidence of Mrs Button in that both she and Mr Bird, later the same day at the second meeting, evidently thought it was desirable to give Mr Mitchell an opportunity to reconsider his position.

Because I think discussions were so heated at the relevant time, I also believe that when Mr Mitchell left the meeting he most likely did use the word "resign" or some word or words of similar nature, or that he threatened to take some action of that kind. It is indicative of the state of tension that apparently then existed between the parties that no one person present at that meeting, in my opinion, has a clear and unambiguous recollection of what Mr Mitchell actually said-including Mr Mitchell himself. Even Mr Bird was not prepared to go beyond describing Mr Mitchell's statements as "along the lines of, 'I'm not signing this. I resign. I'm out of here'."277

Mr Mitchell's negotiations with P & O demonstrate that he was clearly an employee who knew his way around industrial awards and agreements. It is also clear that, throughout his period of employment with P & O, he regarded himself as being an employee until such time as he should sign a contract expressing a view to the contrary.278 The presumption I draw from those observations, therefore, is that Mr Mitchell knew, or should have known, what the award required of him in terms of bringing his contract of employment to an end, ie. as Mr Tullgren pointed out, Mr Mitchell was obliged to give a week's notice or risk forfeiture of one week's pay.279 The evidence is that Mr Mitchell did not give the required period of notice.

In my view, the fact that Mr Mitchell did not give notice as required by the award is inconsistent with his knowledge of industrial awards and agreements and his experience as an employee bound by such instruments. However, that same fact, it seems to me, is entirely consistent with his decision to walk out of a tense meeting, in the heat of the moment, making statements about his possible future intentions. In short, I think Mr Mitchell, in the heat of the moment and without much thought, said what he did-whatever the words actually were-as a bargaining tactic to test the strength of Mrs Button's resolve, without in any way actually resigning or expressing an intention to really do what he most likely threatened. Mrs Button's belief at the time that Mr Mitchell actually withdrew his services is quite understandable, given that she thought of him as a contractor.

The above conclusions are as far as I can take the evidence on this issue, given its generally unsatisfactory nature. Accordingly, having weighed that evidence, I find on a balance of probabilities that Mr Mitchell, even though he most likely talked about resigning, or threatened to resign, at the first meeting of 5 February 1998, did not resign and did not intend those statements or threats, if he thought about them at all, to be taken as an actual resignation. The conflicting and unreliable nature of the available evidence, in my opinion, makes it unsafe for me to come to any other conclusion in all the circumstances.

Valid Reason for Termination

P Tullgren for the applicant:

Section 31(1A) of the Act incorporates Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer (the ILO Convention). The Convention requires, among other things, that the employer must have a valid reason related to "capacity or conduct" or "operational requirements of the undertaking" for dismissing an employee.280

In the case of Mr Mitchell, Mrs Button dismissed him because, along with Mr Jones, he refused to agree to P & O's proposed contract arrangements.281

As to Mr Jones, the evidence shows Mrs Button dismissed him for two reasons. First, he went to the hospital's administration on 4 February 1998 to discuss his P & O contract, when in Mrs Button's view that was properly a subject for discussion with her.282 Second, because she believed information provided by Mr G Howard-a hospital administrator-that Mr Jones had spoken to the union on 5 February and looked as if he was trying to disrupt P & O's services by holding a union meeting. 283

The term "valid reason", as used in Article 4 of the ILO Convention, is the subject of consideration in a number of decided cases. In the first place, it is clear that the employer must provide a valid reason for dismissal that is within the terms of the Convention: Lupoi v Phillips Fox.284 Further, Article 8 of the Convention ensures the right of an employee to challenge an unfair dismissal, bearing in mind also that it is an implied term of an employment contract that that an employer be "good and considerate" to its employees: Nettlefold v Kym Smoker Pty Ltd.285

In Kerr v Jaroma Pty Ltd286 Marshall J, after referring to the decided cases, in particular Northrop J in Selvachandran v Peteron Plastics Pty Ltd,287 observed that a "valid reason" is "one which is defensible or justifiable on an objective analysis of the relevant facts".288 In the present case, there was no objective analysis of any kind. The evidence shows Mrs Button acted on what Mr Howard told her he thought Mr Jones was going to do, ie hold a union meeting. Mrs Button, even if concerned about some disruption to P & O's services, neither asked Mr Jones about the matter nor made any other inquiries. Those circumstances, in terms of "capacity or conduct" or "operational requirements of the undertaking", do not disclose a valid reason for dismissing Mr Jones.

Concerning Mr Mitchell, unsuccessful negotiations regarding the proposed contract occurred on several occasions, finally concluding with Mrs Button's last minute effort on the day of his dismissal.289 Later the same day Mrs Button dismissed him over the telephone because he would not agree to the proposed contract. Mr Mitchell's refusal to sign P & O's contract is not a valid reason for dismissal.

The uncontested evidence is that neither Coverall Security nor P & O ever complained about the work performance of either Mr Jones or Mr Mitchell. Furthermore, the individuals never received any warnings that might have led them to believe their continued employment with P & O could be in peril. Mr Jones and Mr Mitchell did not know of their impending dismissal until Mrs Button actually dismissed them.

In Thomas v Lynch t/a Bellingen Grocery Wilcox CJ, referring to Section 170DE(1) of the Workplace relations Act 1996 (Cth), stated that: 290

"It is conducive to that purpose [improving the way employers treat their employees] to interpret s 170DE(1), in a situation like this, as requiring that, before a notice of termination of employment is given, the employer attempt a real discussion with the employee about the best way of handling the problem confronting them both."

In the present case, the onus was on Mrs Button to talk to Mr Jones if she held the view that he was going to disrupt the Company's services. Mrs Button's obligation was not to act on some rumour but to find out whether it was true. In Mr Mitchell's case, when Mrs Button discovered she could not get her own way, she simply dismissed him. Mrs Button dismissed both employees without ever attempting to discuss the matter with them.

In Selvachandran Northrop J, in the course of discussing the meaning of "valid reason", went on to state that:291

"A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1) [of the federal Act]. At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provision must 'be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly ..."

On the best construction of the evidence in the present case, the actions of P & O in dismissing Mr Jones and Mr Mitchell were spiteful and, at worst, capricious, fanciful and prejudiced. Furthermore, the evidence shows that P & O neglected the notion of fairness as an element of "valid reason". A number of decided cases, eg Nettlefold v Kym Smoker and Kerr v Jaroma, suggest that if a decision to dismiss is not defensible, justifiable or fair, it does not constitute a "valid reason".

S Gates for the respondent:

Mr Jones was the only person to whom the Company declined to offer further work. If he was a person capable of being dismissed, ie an employee, then there was a termination by P & O for the reasons outlined by Mrs Button in her evidence in cross-examination. That is to say, Mr Jones (a) discussed his proposed P & O contract with the hospital's administration instead of Mrs Button and (b) tried to disrupt P & O's services by holding a union meeting.292

Findings

I begin my consideration of these issues with Section 31 (1A) of the Industrial Relations Act 1984 and, through it, Part II of the International Labour Organisation's Convention concerning Termination of Employment at the Initiative of the Employer. Part II of the Convention, on the authority of the Full Court of the Supreme Court of Tasmania in Saarinen v University of Tasmania,293 must be read and understood having regard to the definition of "termination" and "termination of employment" as set out in Part I of the Convention, ie:294

"For purposes of this Convention the terms "termination" and "termination of employment" mean termination of employment at the initiative of the employer."

The first question that arises in the present context, therefore, is whether there was such a termination in relation to Mitchell and Jones.

I have already found that Mitchell and Jones were full-time employees engaged, most likely, for a short term in anticipation that they would each sign P & O's proposed contract.295 In the circumstances both individuals, in my opinion, were persons capable of being dismissed by P & O.

In Mr Mitchell's case my finding, on a balance of probabilities, is that even though he most likely talked about resigning, or threatened to resign, at the first meeting of 5 February 1998, he did not resign and did not intend those statements or threats, if he thought about them at all, to be taken as an actual resignation.296

The evidence surrounding the circumstances in which Mr Mitchell's employment came to an end is very unsatisfactory and unreliable, as I have already mentioned.297 Mitchell and Jones, according to their evidence, were in no doubt that Mrs Button telephoned each of them separately late in the afternoon of 5 February and, among other things, apparently said that P & O would not require either of them to fulfil their next rostered shift.298 Mr Jones said he recalled Mr Mitchell saying to him at the time words to effect that "she had sacked me".299 For his own part, Mr Jones' recollection was that he responded to Mrs Button by saying "OK, so you're terminating my employment".300

Very little of Mitchell and Jones' evidence finds corroboration in the evidence of Mrs Button. Her evidence, in general on this point, is that she did not "dismiss" anyone believing Mitchell and Jones to be contractors rather than employees but that, in any event, Mr Mitchell had already withdrawn his services and that, when she spoke to Mr Jones, she told him P & O no longer required his services rather than mentioning his next shift.301 At no stage during the course of her evidence did Mrs Button admit to making a similar call to Mr Mitchell. However, her cross-examination evidence on this point is equivocal and raises doubt in my mind.302

After weighing this generally unsatisfactory evidence I have come to the conclusion that, on a balance of probabilities, Mrs Button most likely telephoned both individuals and gave each of them the same or a similar message. That message was to effect that either P & O did not require them for their next rostered shifts or that the Company no longer required their services. In all the circumstances and bearing in mind my finding that, while working for P & O, Mitchell and Jones were employees, I am of the opinion that Mrs Button's actions on behalf of P & O amounted to a termination of each individual's employment at the initiative of the employer.

The next question, consequently, is whether there was a valid reason for P & O to terminate Mitchell and Jones' contracts of employment. Article 4 of the ILO Convention provides that:

"The employment of a worker shall not be terminated unless there is a valid reason for such termination concerned with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service."

Mr Mitchell

Nothing in the evidence before me indicates that P & O gave Mr Mitchell any reason for terminating his employment. That situation is quite understandable, given Mrs Button never perceived Mr Mitchell to be other than a contractor. Most likely, in the circumstances, all she told him, to put P & O's position at its highest, is that his services were no longer required.

There is equally no suggestion in the evidence that P & O in any way based its termination of Mr Mitchell's employment on his "capacity or conduct". Consequently, I assume Mrs Button relied on what she understood to be P & O's "operational requirements". That is to say, as frequently stated by her during the course of the negotiations that followed the letters of 24 December 1997 to Mitchell and Jones, that P & O was engaging contractors and not employing people.303

The course of the parties' negotiations, particularly after 4 February 1998 when Mr Mitchell told Mrs Button that, on the advice of his solicitor, he would not sign P & O's proposed contract in the form offered304-a declaration he evidently repeated at both meetings of 5 February305-make it clear to me that Mrs Button ended Mr Mitchell's employment for that very reason. Mr Tullgren's assertion is that such a reason does not constitute a valid reason for termination of the kind specified in Article 4 of the ILO Convention. Having regard to the facts of this case, I do not agree with him.

In the circumstances of this case-that, on the facts, Mitchell and Jones were actually employees rather than contractors-the only conclusion I can reasonably draw from Mrs Button's actions in engaging Mitchell and Jones on 26 January is that she did so conditionally. That is to say, on the basis of an expectation on her part that both would quickly provide evidence of appropriate insurance cover and sign P & O's proposed contract.306 In other words, in my opinion, P & O's continued engagement of Mitchell and Jones was dependent upon the latter's willingness to become contractors.

Mr Mitchell was fully aware of P & O's position because he knew, at least from 24 December 1997, that the Company's intention was to engage contractors, not employees.307 Once Mr Mitchell made it plain to Mrs Button, as he did with abundant finality at the conclusion of negotiations on 5 February 1998, that he would not sign P & O's proposed contract in the form offered (or, according to Mrs Button, in any form308), it was open to P & O at its discretion, in my opinion, to terminate his employment. In the circumstances, I find that P & O had a valid reason, within the meaning of Article 4 of the ILO Convention, for terminating Mr Mitchell's employment.

Mr Jones

Mr Jones' circumstances differ from those of Mr Mitchell in that, by her own admission, Mrs Button brought his engagement to an end because (a) he discussed his proposed P & O contract with the hospital's administration instead of with her and (b) he tried to disrupt P & O's services at the hospital by holding a union meeting.309 In the circumstances, I conclude that P & O's reason for terminating what I have found to be his contract of employment related to Mr Jones' conduct rather than to his capacity as a worker or P & O's operational requirements.

Mrs Button's evidence is that she formed her views about Mr Jones' relevant activities310 on the basis of a discussion she held with a hospital officer-Mr G Howard-during the afternoon of 5 February 1998. Mrs Button freely admitted she did not discuss Mr Howard's allegations with Mr Jones before she terminated his services,311 advancing in explanation the reason that "they [Mitchell and Jones] were contractors and I didn't consider that a union meeting was part and parcel of what should be happening in the hospital, causing problems".312

In my opinion Mrs Button did not know and could not have known whether, were he a contractor or an employee, Mr Jones was guilty of any act likely to justify his dismissal. That is so, I believe, because Mrs Button's own evidence is that she took no steps to investigate the matter or to verify with Mr Jones the allegations put to her by Mr Howard about Mr Jones' conduct.313

In the circumstances, I am unable to see that, on the evidence, Mrs Button had any reason, let alone a valid reason of the kind mentioned in Article 4 of the ILO Convention, to terminate Mr Jones' contract on grounds related to his conduct, irrespective of whether he was a contractor or an employee. In my opinion that is because, mere suspicion aside, Mrs Button simply did not know whether Mr Jones had actually engaged in the conduct alleged by Mr Howard, let alone whether, if he did, he had engaged in conduct that might have warranted his termination. That, in effect, was the submission put to me by Mr Tullgren.314 Accordingly, I find that Mrs Button did not have a valid reason for terminating Mr Jones' employment.

Article 7 of the ILO Convention provides that:

"The employment of a worker shall not be terminated for reasons related to the workers conduct or performance before he is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide this opportunity."

Mr Mitchell

My earlier finding is that, in the circumstances, P & O had a valid reason for terminating Mr Mitchell's employment.315 In the course of coming to my conclusion I observed that there was no suggestion in the evidence that P & O brought Mr Mitchell's employment to an end on the basis of his capacity or conduct. It must therefore follow, I assumed, that Mrs Button acted on grounds based on P & O's operational requirements. Consequently, in my opinion, the facts surrounding Mr Mitchell's termination do not appear to call into operation the provisions of Article 7.

If I am wrong in coming to this conclusion and P & O based its termination of Mr Mitchell on grounds that do call into operation Article 7 of the ILO Convention, then my further conclusion is that, in so acting, P & O did not deny Mr Mitchell the procedural fairness rights thereby accorded him. In support of this conclusion I rely on the undisputed evidence, a rare element in these proceedings, that at the second meeting of 5 February 1998 Mrs Button, in the company of Mr Bird, expressly invited Mr Mitchell to reconsider his position, an invitation that he apparently declined.316 Accordingly, I find that, if, contrary to my earlier expressed view, Article 7 of the ILO Convention does apply to P & O's termination of Mr Mitchell's employment, Mrs Button, in so acting, did not fail to provide him with an opportunity to defend himself against her allegations, if that is what they were.

Mr Jones

I have already found that, in the case of Mr Jones, Mrs Button did not have a valid reason for terminating his employment. In coming to that conclusion I assumed that Mrs Button's actions related to Mr Jones' conduct rather than to his capacity or the Company's operational requirements.

However, if I an wrong in forming that view then, even if there was present a valid reason for terminating Mr Jones' employment, it is abundantly clear from Mrs Button's own admission that she did not provide him with an opportunity to defend himself against her allegations, if that is what they were. Consequently, if those were the circumstances that actually did obtain, Mrs Button's actions, in my opinion, constituted a substantive denial of the right that Section 31(1A) of the Act, together with the ILO Convention, vested in Mr Jones. That is to say, to not have his employment terminated for reasons related to, in this case, his conduct, before being provided with an opportunity to defend himself against the particular allegations. Accordingly, since there was no suggestion before me that P & O could not reasonably have been expected to provide such an opportunity, I find that if, contrary to my earlier expressed view, P & O did have a valid reason for terminating Mr Jones' employment, Mrs Button, in so acting, denied him the right to procedural fairness accorded by Article 7 of the ILO Convention. For all these reasons I find that P & O unfairly dismissed Mr Jones from his employment.

Remedy

P Tullgren for the applicant:

By way of primary remedy the applicant sought reinstatement of both Mr Mitchell and Mr Jones. Reinstatement in both cases should be to the position of security guard formerly held by each individual at the Royal Hobart Hospital. The terms of reinstatement should be no less favourable than those that applied before their dismissal.317

Reinstatement is the only appropriate course of action because the evidence shows that P & O deliberately set out to create an artificial relationship. The Company advertised for employees and told them there would be opportunities for overtime. P & O then told those employees the Company wanted them to become contractors and that, unless they submitted invoices, they would not get paid.

Mitchell and Jones, however, did not agree to become contractors. At the time of their dismissals they were not and had never been contractors. In those circumstances, any action by the Commission to do other than order reinstatement would reward P & O for flagrantly disregarding the award system.

There is nothing in the evidence that tends to suggest reinstatement of Mitchell and Jones would cause any problems for P & O. Both individuals are looking for work and want to go back to their former jobs.

S Gates for the Respondent:

If Mr Mitchell was other than a casual employee, he unilaterally resigned from P & O. In doing so, he exercised a right vested in him by the Award that is not capable of either rejection or acceptance by P & O. In the circumstances, the Commission should dismiss Mr Mitchell's application because there was no termination at the initiative of the employer.

In the event that Mr Jones was other than a casual employee, the grounds for his dismissal appear clearly in Mrs Button's evidence.318 Should the Commission find that those grounds do not constitute a valid reason for termination-P & O asserts they do-or that Mr Jones did not receive an adequate opportunity to defend himself, reinstatement, in all the circumstances, is not practical for the following reasons:

  • There clearly existed a high level of animosity and distrust between P & O and Mr Jones. Mr Mitchell's evidence, for example, is that the Company misled him.319

  • Mr Jones and Mr Mitchell engaged in conduct that, in P & O's view, was highly destructive of the trust and confidence necessary in an ongoing relationship, ie they raised matters concerning their contracts directly with the Hospital, P & O's principal, to the Company's jeopardy.

P & O replaced Mitchell and Jones with other persons. They, together with all other persons providing security services for P & O at the Royal Hobart Hospital, are independent contractors.320 If the Commission were to order reinstatement, it would have to do so on the same terms and conditions as other security service providers on site, ie as contractors. The current hourly rate of $14.50 is a rate applicable to contractors, not employees.

Should the Commission need to turn its mind to compensation, any earnings received by Mitchell and Jones after 5 February 1998 must be offset against the amount of proposed compensation. As to that amount, the Commission should have regard to the likely duration of their continued employment had Mitchell and Jones not ceased work when they did. The evidence shows a manifest and differing viewpoint between the parties as to how P & O should engage them, ie as employees or contractors. In all the circumstances, it is very likely that had P & O's engagement of Mitchell and Jones not ended on 5 February, it would have come to an end very shortly thereafter.

Findings

Mr Mitchell

My earlier finding is that P & O had a valid reason for terminating Mr Mitchell's employment that does not appear to call into operation the procedural fairness provisions of Article 7 of the ILO Convention. In those circumstances, in my opinion, the remedy of reinstatement, pursuant to Article 10 of the Convention, is not available since there is no finding that Mr Mitchell's termination was unjustified or unfair-an outcome that is not prejudiced even if Article 7 should apply, since I have found there was no denial by P & O of Mr Mitchell's rights. Accordingly, there is no need for me to make a finding as to the appropriateness or otherwise of reinstatement.

However, in light of my finding that Mr Mitchell was not a contractor but a full-time employee321 bound by the Security Industry Award,322 his termination by P & O was clearly unlawful to the extent that he was not given notice in accordance with Clause 12 - Contract of Employment. Paragraph (a) of that Clause provides, in part, that "Casuals excepted, employment shall be terminated by a week's notice...or by the payment ... of a week's pay as the case may be in lieu of such notice ". Because Mrs Button terminated Mr Mitchell's employment without giving him the required period of notice, the Company, in my opinion, breached the provisions of Clause 12(a) of the Security Industry Award. I find to that effect.

Mr Jones

It is clear from earlier findings that, in my opinion, P & O did not have a valid reason for terminating Mr Jones' employment or, if it did, Mrs Button denied him the right to procedural fairness accorded by Article 7 of the ILO Convention.323 In those circumstances, I now turn to the question of reinstatement.

In this regard Mrs Button's evidence is that, following their termination, P & O replaced Mitchell and Jones, not with employees, but with independent contractors.324 That evidence is consistent with the approach taken by P & O throughout the course of the Company's negotiations with Mitchell and Jones, ie, in Mrs Button's words "I was engaging contractors and not employing people".325 Notwithstanding that approach Mrs Button did actually employ two people, ie Mitchell and Jones; but, as I have found, only on the basis of an expectation on her part that both individuals would sign P & O's proposed contract. The employees refused to sign such contracts and Mitchell, because he did not meet that condition of his employment, certainly lost his job for that reason.326

Nevertheless, the present matter is not one of those cases where an employer replaced a dismissed employee with another employee. If it were, I might have taken a different view from that which now follows. The best evidence before me however, that of Mrs Button, is that P & O does not employ persons, but only engages independent contractors, to provide security services at the Royal Hobart Hospital. In the circumstances I take the view, and so find, that because there are no positions of employment at P & O, regarding its hospital operations, to which I might reinstate Mr Jones, reinstatement is impractical. In light of this view I have not found it necessary to consider Mrs Button's loss of trust and confidence in Mr Jones, upon which grounds Mr Gates also relied in expressing P & O's opposition to reinstatement.

Section 31(1B) of the Industrial Relations Act 1984 provides that:

"If a Commissioner, in hearing an industrial dispute relating to termination of employment, considers that an employee or a former employee has been unfairly dismissed but reinstatement to the employee's or former employee's position is impractical, the Commissioner, if of the opinion that it is appropriate to do so, may make an order requiring the employer to pay the employee or former employee compensation of any amount the Commissioner deems appropriate."

I have already found that P & O unfairly dismissed Mr Jones. Having now also found that reinstatement is impractical, I turn to the question of compensation. In considering this issue I take into account, as Section 31(1A) of the Act obliges me to do, Article 10 of the ILO Convention. That Article, because it deals with "adequate compensation or such other relief as may be deemed appropriate", expresses the sentiments to which Section 31(1B) of the Act gives direct effect.

On the facts of this case, I believe it is appropriate to consider compensation because, in dismissing Mr Jones, P & O ignored his right at law, according to Section 31(1A) of the Act and Article 4 of the ILO Convention, to not have his employment terminated without valid reason or, if Article 7 of the Convention applied, to not have his employment terminated before being given an opportunity to defend himself. In the circumstances, in my opinion, Mr Jones is entitled to compensation.

There is a long line of decided case authority, of which the judgment of Wilcox CJ in Nicholson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233 may arguably be one of the more recent, that outlines the approach to be adopted in assessing compensation of the kind referred to in Article 10 of the ILO Convention and in Section 31(1B) of the Act. Neither party referred me to those authorities. In the circumstances, I propose to take the general approach that it is appropriate to consider what would have been likely to occur if P & O had not breached either Article 4 or Article 7 of the ILO Convention by dismissing Mr Jones without a valid reason or, if there was a valid reason for dismissing him, P & O had given him an opportunity to be heard in his own defence.

In that regard the relevant evidence is that Mr Jones, unlike Mr Mitchell, never told Mrs Button he would not sign a contract.327 To the contrary, his evidence is that, depending upon the conditions offered-by which Mr Jones evidently meant that he would not take a pay cut328he was willing to become a sub-contractor to P & O.329 Mrs Button, in her evidence, confirmed that she could not recall Mr Jones making any statement to effect that he would never sign a contract.330

The conclusion I draw from this evidence is that at 5 February 1998-the day of Mr Jones' dismissal-negotiations between he and Mrs Button concerning P & O's proposed contract were not at an end. How long then, in those circumstances, might P & O's employment of Mr Jones have continued? Given that Mrs Button resisted all the efforts of both Jones and Mitchell over several weeks to improve upon the offered rate of $14.50 per hour, it is unlikely in my view that P & O would have retreated from that position.

Mr Jones, for his part, clearly found the contract as offered to be unacceptable. In the light of his evidence that he would be foolish to take a pay cut, it is unlikely in my opinion that he would subsequently have changed his mind and accepted the contract in the form offered.

Accordingly, it is my opinion, as a matter of judgment having regard to all the facts and circumstances, that Mr Jones could not reasonably have expected his employment to continue beyond a further period of one week in the absence of any agreement on his part to accept the offered terms. Even if P & O had a valid reason for terminating Mr Jones' employment, the evidence, in my view, does not disclose any circumstances that might tend to suggest Mr Jones' employment would have continued beyond such a time period, even if Mrs Button had given him an opportunity to defend himself.

In the presence of a continued refusal by Mr Jones to accept the offered contract, I believe P & O would have had a valid reason to terminate his employment on the same grounds as it had already terminated Mr Mitchell's employment.331

In the circumstances, I assess compensation at the equivalent of one week's pay.

Further to my task under Section 31(1A) of the Act, I turn now to consider Article 11 of the ILO Convention, which provides that:

"A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period."

Taking into account my earlier finding that Mr Jones was an employee when he worked for P & O, the above provision, in my opinion, makes it clear that he was entitled to a reasonable period of notice from the Company that it intended to terminate his employment. The evidence is that Mrs Button gave him no notice at all, merely telling him that his services were no longer required or words to that effect.332

Mr Jones, as I have already found, was a full-time employee bound by the Security Industry Award.333 As such in my opinion he was, as a matter of law, entitled to receive from P & O one week's notice of termination in accordance with Clause 12 - Contract of Employment.334 In the circumstances of this case it is my view that Clause 12, subject to the observations that follow, establishes Mr Jones' right to notice without any need arising for him to rely on Article 11 of the ILO Convention.

However, it seems to me that Article 11 clearly establishes an entitlement in an employee, whose termination of employment was not justified, to "a reasonable period of notice or compensation in lieu thereof" in addition to the compensation for which Article 10 makes provision.

Article 11 also has application in circumstances where the dismissed employee "is guilty of serious misconduct" in which case notice or compensation in lieu is not payable. Clause 12 of the Security Industry Award contains a similar proviso in that it does not affect "the right of an employer to dismiss an employee without notice for misconduct warranting such dismissal".

It seems plain enough, on the basis of my earlier conclusion, that Mrs Button ended Mr Jones' employment for reasons related to his conduct.335 Because the parties called no evidence and put no submissions to me on these issues, it is not possible for me to know whether Mr Jones was guilty of or even engaged in misconduct that was "serious misconduct" in terms of Article 11 or "misconduct warranting" dismissal without notice in terms of Clause 12 of the award. I repeat my earlier observation.336 Mere suspicion aside, Mrs Button simply did not know, and could not have known because she did not investigate the matter, whether Mr Jones had actually engaged in the conduct alleged by Mr Howard let alone whether, if he had, he had engaged in conduct that constituted "serious misconduct" or "misconduct warranting" dismissal without notice.

If there is any doubt at all in these circumstances that doubt, in my opinion, must operate in Mr Jones' favour having regard to the facts. Accordingly, I find that Mr Jones is entitled to receive payment in lieu of notice pursuant to either Clause 12 of the award and or Section 31(1B) of the Act and Article 11 of the ILO Convention.

Orders

Having regard to the findings I have made in the course of preparing these Reasons for Decision, I now make the following orders:

Mr Mitchell

IN ACCORDANCE WITH the powers conferred on me by the Industrial Relations Act 1984 I HEREBY ORDER that:

(I) Pursuant to Section 31, P & O Services Pty Ltd, 134 Main Road, Moonah, Tasmania pay to Mr David Mitchell, 25 Regina Street, Glenorchy, Tasmania in lieu of notice in accordance with Clause 12 of the Security Industry Award, a sum equivalent to one week's pay calculated by reference to the average weekly hours worked by Mr Mitchell during his period of employment with P & O Services Pty Ltd; and that

(II) Pursuant to Section 31, P & O Services Pty Ltd make the payment referred to in paragraph (I) above on or before the close of business on Tuesday, 9 February 1999.

Mr Jones

IN ACCORDANCE WITH the powers conferred on me by the Industrial Relations Act 1984 I HEREBY ORDER that:

(I) Pursuant to Section 31(1B), P & O Services Pty Ltd, 134 Main Road, Moonah, Tasmania pay to Mr Peter Jones, Unit 1, 7 Longley Court, Glenorchy, Tasmania as compensation for unfairly dismissing him on 5 February 1998, a sum equivalent to one week's pay calculated by reference to the average weekly hours worked by Mr Jones during his period of employment with P & O Services Pty Ltd;

(II) Pursuant to Section 31, P & O Services Pty Ltd, 134 Main Road, Moonah, Tasmania pay to Mr Peter Jones, Unit 1, 7 Longley Court, Glenorchy, Tasmania in lieu of notice in accordance with Clause 12 of the Security Industry Award and or Article 11 of Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer, a sum equivalent to one week's pay calculated by reference to the average weekly hours worked by Mr Jones during his period of employment with P & O Services Pty Ltd; and that

(III) Pursuant to Section 31, P & O Services Pty Ltd make the payments referred to in paragraphs (a) and (b) above on or before the close of business on Tuesday, 9 February 1999.

 

B R Johnson
DEPUTY PRESIDENT

Appearances:
Mr P Tullgren (6.4.98, 7.4.98 and 7.5.98) with Ms P Shelley (25.2.98, 6.4.98, 7.4.98 and 7.5.98) and Mr D O'Byrne (25.2.98) for the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch.
Mr S Gates (25.2.98, 6.4.98, 7.4.98 and 7.5.98) with Mr C Opare (25.2.98, 6.4.98, 7.4.98 and 7.5.98), Mrs R Button (25.2.98) and Mr C Bird (25.2.98) for P & O Services Pty Ltd.

Date and Place of Hearing:
1998
February 25
April 6; 7
May 7
Hobart

1 T7515 of 1998.
2 T7516 of 1998.
3 Exhibit T3, p. 1.
4 Exhibit T4, p. 1.
5 Security Resources P/L ACN 052 408 474 Enterprise Agreement 1997.
6 Exhibits T3 and T4, Annexure "C".
7 Exhibits T3 and T4, p. 3.
8 Supra.
9 Exhibits T3 and T4, Annexure "E".
10 Pursuant to Section 61L of the Industrial Relations Act 1984.
11 Exhibit T3, Annexure "A".
12 Statutory Interpretation in Australia Pearce and Geddes, Butterworths 1988, p. 11.
13 Transcript 7/5/98, p. 173.
14 Statutory Interpretation in Australia Pearce and Geddes, Butterworths 1988, p. 67.
15 Supra, p. 74.
16 Supra, p. 204.
17 Supra, p. 27.
18 Supra, p. 64.
19 Transcript 6/4/98, p. 59 (Mitchell) and 7/4/98, p. 75 (Jones).
20 T1807 of 1989.
21 Section 2(2).
22 Section 2(1).
23 Above, pp.4 -6.
24 Above, p. 7.
25 George Hudson Ltd v The Australian Timber Workers' Union (1923) 32 CLR 413 at 435 per Isaacs J. Mr Tullgren did not direct me specifically to this case. However, in my opinion, it is the precursor in an industrial specific context, of a long line of similar general authority to which he did refer.
26 Above, p. 5.
27 Above, p. 6.
28 Exhibit T3, Annexure "A", Clause 5.
29 Clause 2.
30 Above, p. 7.
31 Exhibits T3 and T4, p. 2.
32 Transcript 7/4/98, p. 120.
33 Above, p.2.
34 Exhibits T 3 and T4, p. 2.
35 (1990) 65 ALJR 58.
36 Commonwealth Conciliation and Arbitration Act 1904, Section 61(d).
37 Above, p. 6.
38 (1990) 65 ALJR 58.
39 (1990) 65 ALJR 58, 60.
40 (1927) 39 CLR 533.
41 (1990) 65 ALJR 58, 63.
42 Supra, p. 60.
43 Above, p. 7.
44 Sections 61C and 61D.
45 Above p.6
46 Australian Taxation Office, Income Tax Ruling IT 2129, Paragraph 9.
47 Supra, paragraph 15.
48 Supra, paragraphs 19 and 20.
49 Supra, paragraphs 5 and 35.
50 Supra, paragraph 43.
51 Supra, paragraph 42.
52 Supra, paragraph 44.
53 Supra, paragraphs 46 and 47.
54 Appendix B, Item 1.
55 Supra, Item 3.
56 Supra, Items 5 and 6.
57 Supra, Item 7.
58 Supra, Item 8.
59 Supra, Items 11 and 12.
60 Supra, Items 13 and 14.
61 Supra, Item 16.
62 Supra, Item 18.
63 Supra, Item 19.
64 Supra, Item 21.
65 Australian Tax Office Superannuation Guarantee Ruling SGR 93/2, Paragraph 21.
66 [1969] 2QB 173, 184-185.
67 [1990] 2 AC 374, 383 per Lord Bridge of Harwich, Lord Templeman, Lord Griffiths, Lord Goff of Chieveley and Lord Lowry.
68 Supra, p. 387.
69 [1952] 1 TLR 101 CA p. 111.
70 (1985-1986) 160 CLR 16, 26.
71 96 ATC 4898.
72 Supra.
73 Supra, p.4900.
74 (1989) 34 IR 179, 184.
75 99 ALR 735, 755.
76 96 ATC 4898, 4899.
77 (1985-1986) 160 CLR 16.
78 T6637 of 1996, Reasons for Decision 27 June 1997.
79 Supra, p. 11.
80 96 ATC 4898, 4900. His Honour went on to say he believed the respondent's submission missed the point. The significant feature, he said, was whether the Commissioner acquiesced in the taxpayers' description of themselves.
81 Transcript 6/4/98, pp. 42-45, 59-60 and 64; Transcript 7/4/98, p. 80.
82 Transcript 7/5/98, pp. 217-218.
83 Exhibits T3 and T4, Annexure "E".
84 Exhibit T5.
85 Exhibits T3 and T4, Annexure "E".
86 Exhibit T5.
87 Exhibits T3 and T4, Annexure "C".
88 Transcript 6/4/98, p. 33. Mr Jones already possessed such a licence - transcript 7/4/98, p. 77 and p. 102 (Button).
89 Supra, p. 41.
90 Supra.
91 Transcript 6/4/98, p. 31.
92 Supra, pp. 31-32.
93 Exhibit T3, p5; Transcript 6/4/98, pp. 22-23.
94 Transcript 7/4/98, pp. 103-104 (Button). I am unable to identify any evidence given by Mr Bird on this point.
95 Transcript 7/4/98, pp. 163-164 per witness Bird in cross-examination.
96 Supra, p. 84.
97 Supra, pp. 160-161.
98 Supra, p. 159 per witness Bird.
99 Supra, p. 116 per witness Button.
100 Exhibits G1 and G2.
101 Transcript 7/4/898, p. 116 (Button) and p. 158 (Bird).
102 Supra, p. 99 per witness Button.
103 Supra.
104 Supra, p. 102 per witness Button.
105 Transcript 6/4/98, p. 33 (Mitchell) and 7/4/98, p. 83 (Jones).
106 Transcript 7/4/98, p. 116 per witness Button.
107 Exhibits T3 and T4, Annexure "F".
108 Exhibits T3, Annexure "A", Clause 6(c).
109 Exhibits T3 and T4, Annexure "C".
110 Transcript 6/4/98, p. 70 (Mitchell) and 7/4/98, p. 94 (Jones).
111 Exhibits T3 and T4, Annexure "C".
112 Supra, p. 2.
113 Exhibit T3, Annexure "E".
114 Transcript 6/4/98, p. 63.
115 Transcript 7/4/98, p. 95.
116 Supra, p. 119 and also, in the same vein, p. 121.
117 Transcript 7/4/98, pp. 122-123.
118 Above, p. 26.
119 Exhibit T3 (Mitchell) p. 2 and Exhibit T4 (Jones) p. 2.
120 Transcript 7/4/98, p. 125.
121 Supra.
122 Supra, pp. 157-158 and 161-162.
123 Supra, pp. 98 and 126-128.
124 Supra.
125 Transcript 6/4/98, p. 38.
126 Supra, p. 39.
127 From a "security guard" to a "security agent". See below, p. 24.
128 Transcript 6/4/98, p. 39.
129 Supra, pp. 39, 50, 63 and 67.
130 Supra, p. 39.
131 Transcript 7/4/98, p. 77.
132 Supra.
133 Transcript 7/5/98, p. 233.
134 Transcript 6/4/98, p. 40.
135 Supra, p. 67.
136 Supra, p. 50.
137 Transcript 7/4/98, p. 79.
138 Supra, p. 80.
139 Supra, p. 98.
140 Supra, p. 158.
141 Exhibits T3 and T4.
142 The evidence is not clear as to when this meeting took place. Mitchell and Jones thought it was on or about 15 December 1998 (Exhibits T3 and T4), whereas Mr Bird thought it was a week later or even longer than that (Transcript 7/4/98, p. 158).
143 Exhibits T3 and T4.
144 Transcript 7/4/98, p. 158.
145 Supra, p. 98.
146 Above, p. 28.
147 Exhibits T3 and T4, paragraphs 24 (Mitchell) and 23 (Jones).
148 Below, p. 31.
149 Above, p. 29.
150 Transcript 6/4/98, p. 39 (Mitchell) and 7/4/98, p. 79 (Jones).
151 Exhibits T3 and T4, p. 3.
152 Transcript 7/4/98, pp. 118 and 134.
153 Supra, p. 135.
154 Transcript 6/4/98, p. 68.
155 Transcript 7/4/98, p. 78.
156 Above, p. 29.
157 Transcript 6/4/98, p. 31.
158 Supra.
159 Supra, p. 33.
160 Transcript 7/4/98, p. 83.
161 Exhibits T3 and T4, p. 4.
162 Transcript 6/4/98, p. 47 (Mitchell) and 7/4/98, pp. 83 and 91 (Jones).
163 Transcript 7/4/98, p. 158.
164 Transcript 6/4/98, p. 47.
165 Supra, p. 29 (Mitchell: "We'd signed nothing, so far as I'm concerned we were employees up to the date until we had a contract.") and 7/4/98, p. 79 (Jones: who understood himself to be an employee from the time of the 15 December 1997 interview).
166 Exhibit T3, p. 5.
167 Exhibits T3 and T4, p. 5.
168 Exhibit T4, p. 5.
169 Exhibit T3, p. 5 and transcript 6/4/98, p. 20.
170 Transcript 7/4/98, p. 74.
171 Transcript 6/4/98, p. 22 (Mitchell) and Exhibit T4, p. 5 and transcript 7/4/98, p. 82 (Jones).
172 Transcript 6/4/98, p. 23 (Mitchell) and 7/4/98, p. 81 (Jones).
173 Transcript 7/4/98, pp. 103-104.
174 Above, p. 31.
175 Transcript 7/4/98, p. 103. Mr Tullgren objected to some later aspects of this evidence-in-chief, on the grounds that it was not put to Mitchell or Jones in cross-examination. However, the particular evidence upon which I rely here seems free from the point of his objection in that the witness volunteered the information in answer to another, different, question.
176 Exhibits T3 and T4, p. 5.
177 Exhibit T3, p. 5 and Annexure "H" (Mitchell) and Exhibit T4, p. 5 (Jones).
178 Exhibit T3, p. 5.
179 Exhibit T4, p. 5.
180 Exhibit T3, p. 6 (Mitchell) and Exhibit T4, p. 5 (Jones).
181 See, especially, the evidence of witness Button: transcript 7/4/98, pp. 113 and 139.
182 Exhibit T3, p. 7.
183 Exhibit T4, p. 6.
184 Exhibit T3, p. 7.
185 Exhibits T3, p. 7 (Mitchell) and T4, p. 6 (Jones).
186 Exhibits T3, pp. 7-8 (Mitchell) and T4, pp. 6-7 (Jones).
187 Transcript 7/4/98, p. 140 and p. 142, "... I flatly rejected the enterprise agreement in the first place".
188 Supra, pp. 159-160 and 166-167.
189 Supra, p. 167.
190 Transcript 7/4/98, p. 88.
191 Exhibit T3, p. 8 (Mitchell), Exhibit T4, p. 7 (Jones) and transcript 7/4/98, pp. 114-115 and 143 (Button).
192 Above, p. 4.
193 Supra.
194 Above, p. 27.
195 Above, p. 29.
196 Above, p. 30.
197 Above, p. 31.
198 Above, p. 31.
199 Above, p. 32.
200 Above, p. 33.
201 Above, p. 34.
202 Above, p. 19 (Tullgren) and p. 21 (Gates).
203 Above, p. 21.
204 Above, p. 20.
205 Above, p. 23.
206 Supra.
207 Above, p. 23.
208 Transcript 7/4/98, p. 99.
209 Exhibits T3 and T4, Annexure "C".
210 Transcript 7/4/98, p. 160.
211 Transcript 7/4/98, p. 99.
212 Transcript 7/4/98, pp. 164-165.
213 Exhibits T3 and T4, p. 5, for example.
214 Above, p. 24.
215 Above, pp. 24-25.
216 Exhibits T3 (Annexure ("B") and T4 (Annexure "A").
217 Above, p. 24.
218 Transcript 7/4/98, p. 84.
219 Above, p. 38.
220 Transcript 6/4/98, pp. 32-66 (Mitchell) and 7/4/98, pp. 91-92 (Jones).
221 Above, p.36.
222 See the evidence of Mrs Button, above p.37.
223 Above, p. 37.
224 Above, p. 38.
225 Above, p. 36.
226 Transcript 6/4/98, pp. 24 and 33 (Mitchell re liability insurance and licences)
227 Transcript 7/4/98, pp. 102-103.
228 Transcript 6/4/98, p. 37 (Mitchell)
229 Above, p. 21 and Exhibit T5.
230 Above, p. 35.
231 Above, p. 36.
232 Above, p. 38.
233 Above, p. 36.
234 T7049, Reasons for Decision 2 February 1998.
235 Above, p. 25.
236 Above, p. 25.
237 Transcript 7/4/98, p. 128.
238 Supra, pp. 132-133.
239 Above, pp. 16 and 26.
240 Above, p. 3.
241 Above, p. 41.
242 Clause 7 - Definitions.
243 Transcript 6/4/98, p. 66.
244 Above, p. 26.
245 Transcript 7/4/98, pp. 114-115 and 143 (Button) and 166 (Bird).
246 Supra, p. 115.
247 Supra.
248 Transcript, 7/5/98, p. 209.
249 Transcript, 7/4/98, p. 146.
250 Supra, pp. 45 and 88.
251 Transcript 7/4/98, pp. 146-147 and 150.
252 Above, p. 44.
253 Above, p. 34.
254 Transcript 6/4/98, p. 42.
255 Above, p. 34.
256 Transcript 7/4/98, pp. 87-88.
257 Supra, p. 144.
258 Supra, pp. 114-115 and 143-144.
259 Supra, p. 143.
260 Supra, p. 140.
261 Supra, p. 114.
262 Supra, p. 139.
263 Supra, pp. 159-160.
264 Above, p. 33.
265 Transcript 7/4/98, p. 88.
266 Supra.
267 Exhibits T3, p. 8 (Mitchell) and T4, p. 7 (Jones).
268 Supra.
269 Transcript 7/4/98, p. 115.
270 Supra, pp. 115 and 150.
271 Supra.
272 Exhibits T3, p. 9 (Mitchell) and T4, pp. 7-8 (Jones).
273 Transcript 7/4/98, p. 116.
274 Supra, p. 144.
275 Above, p. 28.
276 Above, p. 46.
277 Transcript 7/4/98, p. 159.
278 Above, p. 32.
279 Below, p. 56 - Clause 12(a), Security Industry Award.
280 Article 4.
281 Supra, p. 204.
282 Transcript 7/4/98, pp. 145-146.
283 Supra, pp. 147-149.
284 (1996) SA1091 of 1996, Decision No: 485/96 (960485) per Ritter JR.
285 (1996) 69 IR 370 Per Lee J at p. 372, quoting Lord Denning in Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693.
286 (1996) 70 IR 469.
287 (1995) 62 IR 371.
288 70 IR 473.
289 Above, p. 4.
290 71 IR 307. 
291 62 IR 371, 373.
292 Supra, pp. 145-146 and above, p. 14. Mr Gates did not specify the actual grounds in his submissions but contented himself by informing me that "the reasons for that [Mr Jones' termination] are quite clearly set out in transcript"-7/5/98, p. 216 and also at p. 232. I do not know why he used that curious expression. However, since they are the only reasons for dismissing Mr Jones that witness Button advanced in her evidence, I assume they are the reasons to which Mr Gates refers.
293 Judgment ID Number 121/1997, p. 13 per Underwood J.
294 Article 3 of Part I.
295 Above, p. 44.
296 Above, p. 48.
297 Above, p. 47.
298 Exhibit T3, p. 9 (Mitchell) and Exhibit T4, p. 8 (Jones).
299 Exhibit T4, p. 7.
300 Supra, p. 8.
301 Transcript 7/4/98, p. 144.
302 Above, p. 47, ie Mrs Button said she initially telephoned Mr Mitchell but, instead, got Mr Jones.
303 See, for example, transcript 7/4/98, pp. 98 and 142.
304 Above, p. 37.
305 Above, pp. 46-47.
306 Transcript 7/4/98, p. 103: "At that stage [26 January 1998] I was still waiting on them to provide me with copies of their policies..." and p. 145: "...I considered that it was time [5 February 1998] I needed to make some decisions in order to ensure the service wasn't disrupted."
307 See, for example, transcript 6/4/98, pp. 25 and 39.
308 Transcript 7/4/98, p. 140.
309 Above, p. 49.
310 Transcript 7/4/98, p. 151. Mrs Button also included Mr Mitchell in her statement; however, his alleged role is not relevant for present purposes.
311 Transcript 7/4/98, pp. 150 and 152.
312 Supra, p. 152.
313 Supra, p. 150.
314 Above, pp. 49-50.
315 Above, p. 53.
316 Above, p. 47.
317 Exhibits T6 (Mitchell) and T7 (Jones).
318 Above, p. 50.
319 Transcript 6/4/98, p. 42.
320 Transcript 7/4/98, pp. 116-117 per witness Button.
321 Above, p. 44. 
322 Above, p. 41.
323 Above, p. 55.
324 Above, p. 56.
325 Transcript 7/4/98, p. 142.
326 Above, p. 53.
327 Transcript 7/4/98, p. 88.
328 Supra, p. 89.
329 Supra, p. 88.
330 Supra, p. 146.
331 Above, p. 53.
332 Above, p. 51.
333 Above, p. 44.
334 Above, p. 56.
335 Above, p. 53.
336 Supra.