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Tasmanian Industrial Commission

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T12008

 

TASMANIAN INDUSTRIAL COMMISSION

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

Roger Wayne Donohoe
(T12008 of 2005)

and

Kernow Kensa Pty Ltd

 

COMMISSIONER JP McALPINE

HOBART, 5 July 2005

Industrial dispute - alleged breach of award or registered agreement - application dismissed

REASONS FOR DECISION

[1] On 30 March 2005, Roger Wayne Donohoe (the applicant), applied to the President, pursuant to s.29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of a dispute with Kernow Kensa Pty Ltd arising out of an alleged breach of an award or a registered agreement.

[2] The matter was listed for hearing on 14 April 2005 (Conciliation Conference) and 31 May 2005 at the Commonwealth Law Courts, 39-41 Davey Street, Hobart, Tasmania.

[3] Kernow Kensa Pty Ltd (the respondent), operated by Mr P Trembath, was under contract to Australia Post to provide a parcel delivery service on their behalf.

[4] The applicant was engaged by the respondent as a courier to deliver items of parcel mail from 18 November 2003. He resigned from the company of his own volition on 11 February 2005. The application notifying a dispute was received by this Commission on 30 March 2005.

[5] The applicant was engaged on the basis of a set fee of 70c per item to be delivered, referred to as a "parcel rate". He also attracted a fuel allowance of $25 per week and a scanner allowance of $8 per month. He provided his own vehicle, at his expense to transport the parcels for delivery.

[6] The applicant claimed the respondent breached the Transport Workers General Award 2004 by failing to pay him award rates for the hours he worked.

[7] The applicant's employment status, and the hours he claimed to have worked were disputed by the respondent.

[8] Evidence was adduced from the following witnesses:

Mr R Donohoe
Mr P Trembath

BACKGROUND

[9] The applicant asserted he was hired to deliver parcels on behalf of Australia Post by Mr Trembath, the proprietor of Kernow Kensa Pty Ltd. His "run" was consistently West Moonah and Lutana, however he lost the Lutana run towards the end of his time with the respondent.

[10] The applicant confirmed he had agreed to a rate of 70c per parcel handled. He estimated he would process between 60 and 150 parcels on any given day. He asserted he would work between "six-and-a-half to eight hours a day, every day.1 "

[11] The applicant claimed he started work at 6.00 am at the mail depot loading his van, although under cross-examination he agreed that towards the end of his engagement with the respondent he started work between 6.15 am and 6.30 am. How he arranged his deliveries was his choice. The hours he worked were his choice also.

"Mr Trembath didn't say you have got to do them all straight through, you could take a two-hour break ...; is that right? ---Yes." 2

[12] The applicant asserted he worked from whenever he arrived in the morning until 7.45 am loading his vehicle. The respondent confirmed this. At the end of his workday the applicant spent time uploading data from the scanner collected during the day onto the Australia Post system.

[13] The applicant confirmed he used his own vehicle, paid his own insurance and vehicle registration. He also agreed he was responsible for the maintenance of the vehicle and it's fuel.

[14] There were no constraints on his time, other than general parcels had to be delivered between 8.00 am and 5.00 pm. Express parcels specifically had to be delivered before 11.00 am to businesses and, before 3.00 pm to private homes. The timings were a performance requirement of Australia Post.

    "I had a set route of where I had to go each day and obviously he left that up to me to start where I'd normally start." 3

[15] The applicant asserted he kept a daily diary in which he recorded his time and the number of parcels he had delivered. He further asserted he rarely took time off for a lunch or tea break during his working day, even if those working days were alleged to be 10 or more hours long.

[16] The applicant asserted he never complained to Mr Trembath about the limited number of deliveries he could accomplish per hour.

[17] Although the extract from the applicant's diary indicated he finished work on the hour, or on the half hour every day, he conceded he might have been five minutes before or after these times.

[18] The applicant asserted, when Mr Trembath was off work due to illness he started work at 5:30 am to help out. The alleged start time could not be verified. The duration of this arrangement was disputed. Mr Trembath gave the applicant $50 cash in recompense for his extra effort.

[19] Mr Munro, for the respondent, asserted Mr Donohoe was an independent contractor. He cited the following authorities: Stevens v Brodribb Sawmilling Company Proprietary Limited; Gray v Brodribb Sawmilling Company Proprietary Limited (1986); Hollis v Vabu Pty Ltd t/as Crisis Couriers S149/200; and Vabu Pty Ltd v Federal Commissioner of Taxation, NSW Court of Appeal.

[20] Mr Munro argued, should the Commission deem the applicant to have been an employee he should be classified as a Grade 2 casual employee, as defined in the Transport Worker's Award.

[21] Mr Munro asserted the respondent had no reason to be concerned about the hours the applicant worked because it paid him by the parcel.

[22] The respondent had no control over when the applicant started work, although there were practical reasons for starting early enough to leave the depot by 7:45 am. The respondent had no control over breaks taken by the applicant during the day, and had no means of verifying the hours he claimed to have worked.

[23] Mr Munro asserted the diary produced by the applicant lacked credibility and cited a number of anomalies. He also argued, the relevance of the diary produced by the applicant was in question as it only covered a limited portion, two months of the fourteen months he was engaged by the respondent.

[24] Mr Munro raised the credibility of the applicant's claim that he rarely took a lunch, tea or toilet break during his time at work, even on days he claimed to have worked 10 hours straight.

[25] Mr Munro contested the hours the applicant asserted he had worked during his period of engagement with the respondent, mainly on the basis of the inability to verify them and the applicant's anomalous parcel delivery rates.

[26] Mr Munro demonstrated through calculation that the rate of parcel delivery by the applicant was significantly less than that of Mr Trembath, if one was to accept the hours claimed by the applicant.

[27] Mr Munro also presented calculations illustrating the hours the applicant would have worked had he delivered at 29 parcels per hour, akin to Mr Trembath's average rate and 25 parcels per hour, a much more relaxed pace. The applicant's average delivery rate was alleged to be much less than even the 25 parcels per hour.

[28] The respondent contested in the first instance the applicant was an independent contractor and that parcel delivery rates of 25 per hour would have given him more than the award hourly rate.

FINDINGS

[29] By nature of the arrangement, before he was engaged the applicant agreed to be paid a "parcel" rate. As a consequence the respondent, in its view, had no reason to consider the applicant's hours of work. The applicant was not directed by the respondent to work specific hours. The hours he worked were neither monitored by the respondent nor commented upon as a means of control, limitation or performance measure with regard to the respondent's business.

[30] The applicant supplied an excerpt from his diary as proof of the hours he asserted he had worked. He was not asked to keep a record of the hours he worked by the respondent.

[31] The applicant claimed he usually worked right through the day without a meal or a tea break, even on days, which, by his own account, were protracted. I find this difficult to accept, particularly when his time was his own and not controlled by the employer. The applicant also asserted, under cross-examination, he finished work between five minutes either side of the hour, or the half hour, as recorded in his diary every day he worked. I find this questionable given the variables of parcel numbers, weather, traffic and personal needs.

[32] The applicant asserted he diarised all the hours he worked throughout his engagement with the respondent, yet he only produced a small sample covering around two months for the Commission's consideration. The hours claimed by the applicant were never verified, agreed to, or approved by the respondent. The alleged diary entries for the majority of the applicant's time with the respondent were not provided as evidence and could not be challenged. It is not discernible if these diary entries were contemporaneous.

[33] A measure of parcel delivery rate (parcels per hour) was developed by the respondent using the applicant's alleged hours and the number of recorded parcel transactions. There was considerable discrepancy between the average rates of parcel delivery by the applicant to that of Mr Trembath, even given the different "run" characteristics. Although the examples varied, they illustrate at times the applicant did match and even better Mr Trembath's delivery rate. However, they also indicate he averaged only about 60% overall. When challenged on the discrepancy the applicant acknowledged he could work at a high rate.

"... So if I could show you evidence that on your own hours that you delivered 28 parcels an hour, you would accept that it is quite reasonable to do that number ... yes, you could do that, but it wasn't good for the body." 4

[34] In my view this supports the respondent's claim that the applicant did not have defined hours on any day other than to work within the constraints of the Australia Post requirements. It also illustrates the applicant chose to work whatever hours he did, at the pace he chose.

[35] In the absence of alternative evidence of hours worked, it would not be unusual to accept "best evidence". However, in the instant application the Commission is asked to accept scant evidence extrapolated over the duration of the applicant's tenure with the respondent. The tendered evidence could not be challenged, nor verified, and it was peppered with anomalies. Coupled with the dramatic variation between the applicant's parcel delivery rate and that of Mr Trembath, directly linked to the hours worked, it leads me to give little weight to the veracity of the asserted diarised evidence.

[36] There is insufficient substantiated evidence to support the applicant's claim he worked between "six-and-a-half to eight hours a day, every day". I do not accept his assertions that he "worked straight through" without breaks most of the time. The parcel delivery rate discrepancy between the applicant and Mr Trembath further weighs against accepting his alleged diarised record of hours worked.

[37] This application also hinges on the determination of the nature of the business relationship between the applicant and the respondent. Was the relationship that of employer-employee or that of contractor-subcontractor?

[38] The applicant's contract of engagement, Exhibit A1, is entitled "Parcel Delivery Agreement". It does not make the offer of a "job" or "position" with the respondent. In the body of the document, however, reference is made to "employee" and indeed "casual on-call employee". It does not refer to hours of work or an hourly rate of engagement. The document makes it clear there is no entitlement to any form of leave. However, the respondent does undertake to pay superannuation, pay various insurances as well as withhold PAYE obligations.

[39] I now apply the PAYE quick reference " Employee or Contractor" as provided by the Australian Taxation Office:

EMPLOYEE

Indicators that a worker is an employee may include that the worker,

· Is paid for time worked; not the situation in this matter.

· Receives paid leave (eg sick, recreation, long service); not the situation in this matter.

· Is not responsible for providing material or equipment required to do the job; this is not the situation in this matter.

· Must perform the duties of his or her position; this is not specified in the agreement.

· Work hours set by an agreement or an award; not the situation in this matter.

· Is recognized as part and parcel of the business; indeterminate in the instant matter.

· Takes no commercial risk and cannot make a profit or loss from the work performed; not the situation in this matter.

An independent contractor is an entity (eg an individual, partnership, trust or company) that agrees to produce a designated result for an agreed price. In most cases, the contractor:

· Is paid for results achieved; sole purpose of the business was to deliver parcels for which the applicant received remuneration per parcel.

· Provides all or most of the necessary materials and equipment etc to complete the work; the applicant provided a fully functional vehicle to deliver the parcels. He fuelled, maintained, insured and registered it as his vehicle.

· Is free to delegate work to other entities; there is no impediment to this activity in the "parcel delivery agreement".

· Has freedom in the way the work is done; within the overall guidelines of the Australia Post performance indicators there does not appear to be any restriction as to his execution of the role.

· Is free to accept or refuse work; this aspect was not tested. there were no restrictions on the applicant taking on more work. However, the nature of the business would deem he would have been relied on to be available if there were parcels to be delivered.

· Is in a position to make a profit or suffer a loss; the applicant's time spent, choice of route, vehicle usage was determined by himself and any benefits or losses would be within his control.

[40] Some other aspects to be considered:

    · Independence; the contractor must perform duties in accordance with the contract, but not necessarily in other roles for the principal. This was the situation in this matter.

    · Legal Liabilities; Contractor is legally liable for the work performed under contract. This feature was not tested in the instant matter.

    · Integration in business; the contractor works as part of his own business and may be associated with the operation of other businesses. There was no impediment to other associations evident.

    · Livery. The applicant was not required to wear a company uniform or emblazon his vehicle with the company logo.

[41] The instant application was similar to both cited authorities, Stevens v Brodribb Sawmilling Company Proprietary Limited and Gray v Brodribb Sawmilling Company Proprietary Limited (1986), Mason J, pages.3 and 4, at paragraph 12:

"I agree with the majority of the Full Court of the Supreme Court that neither Stevens nor Gray was an employee of Brodribb. The facts, as I have related them, do not support an inference that Brodribb retained lawful authority to command either Stevens or Gray in the performance of the work which they undertook to do. As I have said, they provided and maintained their own equipment, set their own hours of work and received payments, not in the form of fixed salary or wages, but in amounts determined by reference to the volume of timber which they had been involved in delivering, through the use of their equipment, ..."

[42] Although in Vabu Pty Ltd v Federal Commissioner of Taxation, NSW Court of Appeal, in the High Court there was a majority decision against the couriers being independent contractors and a significant observation was proffered:

"... the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations. A different conclusion might, for example, be appropriate where the investment in capital equipment was more significant ..."

[43] In the instant application, the applicant did have the "independence in the conduct" of his operation and did have a significant capital investment in the equipment he supplied.

[44] In summary, the applicant could not prove a case convincingly that he worked the hours he claimed. There was significant doubt as to the accuracy of his "diarised" evidence. However, when the applicant's situation is tested against the "PAYE Quick Reference - Employee or Contractor", particularly taking note of the freedom of control, it is clear he was an independent contractor.

[45] I find the applicant is an independent contractor.

[46] Accordingly, the application is dismissed and I so Order.

James P McAlpine
COMMISSIONER

Appearances:
Mr R W Donohoe for himself
Mr J Munro and Mr P Trembath for Kernow Kensa Pty Ltd

Date and place of hearing:
2005
April 14
May 31
Hobart

1 Transcript, para 68
2 Transcript, para 191
3 Transcript, para 176
4 Transcript, para 214