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Worker

Gerob Investments Ballina PL t/as Beach Life Homes v Compton [2007] NSWWCCPD 180. Roche DP. 

The 62yo respondent carpenter was seriously injured and totally incapacitated after a scaffolding fall at a north coast house construction site in October 2006.

After hearing with the respondent cross-examined on 23.04.07, the arbitrator delivered 'carefully prepared' reasons on 1 May, finding the injured man was a worker simpliciter, or contractor deemed worker within the ambit of 1998 Act Sch 1 cl 2, and awarding continuing ss 36 & 37 weekly payments with a dependant.

The fund agent appealed on liability and average weekly earnings of $869.

There were many varying indicia of the relationship detailed of trial proofs, the arbitrator's determination, and submissions and replies in the appeal.

Those central to the rejection of the liability appeal were:

(i) employer's changing identities,

(ii) work was based on 'purchase orders',

(iii) uniforms,

(iv) control,

(v) start-finish times,

(vi) claimant's partnership with his wife,

(vii) work for 'other entities',

(viii) provision of construction materials and tools by the appellant,

(ix) nail allowance,

(x) variations, and

(xi) tax invoices.

Roche DP noted Stevens v Brodbribb Sawmilling Co PL (1986) 160 CLR 16; Boylan Nominees PL t/as Quirks Refrigeration v Sweeney [2005] NSWCA 8 per Ipp JA at [54], and Australian Air Express PL v Langford [2005] NSWCA 96 per McColl JA at [15-16].

At [59], Mr Roche said: 'The submission that Mr Compton submitted tax invoices in the name of the partnership is not entirely accurate.

"The documentary evidence is inconsistent.

"Two of the documents headed Invoice/Statement are in the name of Ian Compton and one is in the name of the partnership.

"Other hand written documents (not headed 'invoices') are in the name of the partnership.

"The evidence also included several documents headed 'Payment Advice' from Beach Life Homes to 'Compton, Ian - Friday Hut Road Brooklet NSW 2478'.

"Mr Compton's wife performed no work in the partnership save for keeping the books. Mr Compton performed all of the income producing work.

"Without his work the partnership would have had no practical existence.

"Though it is not expressly covered in the evidence, it is doubtful that Beach Life Homes would have contracted with the partnership if Mr Compton had not been a part of it.

"Effectively Mr Compton worked as a sole practitioner, but he dealt with his income in a tax effective manner on the advice of his accountant.

"The appellant's dealings were always with Mr Compton. He worked either on his own or with another carpenter, Kenny Smith, with whom he had no contractual arrangement. If he was unable to do a job he was, on one job at least, given a labourer to assist him and that labourer was paid by Beach Life Homes.

"The arbitrator's finding was that the appellant 'in its paperwork regarded its contractual relationship as being with the applicant personally'. That finding was only partly correct, as the paperwork was not consistent.

"Nevertheless, if the arbitrator was referring to the 'Payment Advice' forms, his finding was correct.

"Considering all of the 'paperwork', I believe that it was open to the arbitrator to find that the contract was personal between Mr Compton and Beach Life Homes. The company sought Mr Compton's skill and experience, not that of any business he allegedly conducted.

"In any event, if Mr Compton had submitted tax invoices solely in the name of the partnership that fact would not have been determinative of the true nature of the relationship with Beach Life Homes: Pitcher v Langford (1991) 23 NSWLR 142, at 154G and 163B; Dalgety Farmers Ltd t/as Grazcos v Bruce (unrep, NSWCA, 3.9.95, BC9505124).

Then [61], Mr Roche said: "I do not believe the arbitrator made any error of fact, law or discretion in concluding that Mr Compton was a worker. That conclusion was open on the evidence and the authorities and I agree with it.

"The appellant had a close and long standing personal working arrangement with Mr Compton, which involved him in working exclusively for it for many years.

"Beach Life Homes had the right to and did exercise significant control over Mr Compton, both in the performance of his duties, and in when and where he performed those duties. The arrangement with Mr Compton was personal to him and made the conclusion that he was a worker inevitable."

The deputy president distinguished Yu Cang Zhao v Monlea PL t/as Nordex Interiors [2003] NSWWCCPD 11 where 'crucially' there was no particular supervision of the applicant, and T/E Development Group No 3 PL v Sheremeta [2006] NSWWCCPD 42 which 'also turned on its facts'.

Considering the alternative finding of contractor deemed worker, noted was the appellant's reliance on Humberstone v Northern Timber Mills (1949) 79 CLR 389 per Dixon J at 402, and Polak v Feature Homes Pty Ltd [2005] NSWWCCPD 125, which was distinguished.

Roche DP referred to Scerri v Cahill (1995) 14 NSWCCR 389 where Bainton A-JA, with Kirby A-CJ and Rolfe A-JA agreeing, held that an applicant who relies on Schedule 1 must prove:

(a) that he was a party to a contract with the respondent to perform work; and

(b) that work exceeds $10 in value; and

(c) that the work is not work incidental to a trade or business regularly carried on by the applicant in his own name or under a business or firm name; and

(d) that the applicant has neither sublet the contract nor employed workers in the performance of it.

The deputy president considered Humberstone at 401 per Dixon J; Turner v Stewardson [1962] NSWR 137; Higgins v Jackson (1976) 135 CLR 174 at 176; and Cam v Cousins Interstate Transport PL [1964] NSWR 1288.

The arbitrator had found: 'The applicant only worked for the respondent. He did not advertise for other work and he did not employ or engage any other person to carry out work for him or under his name.'

Other relevant factors, according to Mr Roche, were: the claimant had no goodwill in his occupation; he could not divest to a third party his personal relationship with Beach Life; he had no place of business nor business name; and he had no right to price adjustment.

"Whilst Mr Compton had his own personal tools and was in partnership with his wife, those facts do not, on their own, establish that he was conducting a business." [77]

On earnings, the arbitrator had 'rightly' rejected 52-week long division of income from the applicant's 2005 tax return or his voice-proven 2006 gross income. The arbitrator had calibrated $869pw by the Building and Construction Industry (State) Award for casual carpenters, to accommodate absence of holiday and sick pay, but deducting four weeks leave, then dividing by 52.

The appellant's complaint of wanting proofs 'overlooked' 1998 WIM s354(2, 3) 'substantial merits' resorts of WCC process, but the arbitrator had erred in accepting a 40-hour week without specific proof.

"Therefore, whilst it will often be appropriate for an arbitrator to inform himself or herself about award rates of pay, it is essential that that be done in compliance with the rules of procedural fairness.

"Those rules require that the parties be informed of the 'matter' on which the Commission intends to inform itself and be given the opportunity to respond to it with further evidence or submissions, as appropriate: Paul Segaert PL  t/as Lidco v Narayan [2006] NSWWCCPD 296," Mr Roche said, [infra 85].

Following, the deputy president said: "In addition, the arbitrator was in error in adopting the casual hourly rate of pay and multiplying it by 40 to determine the current weekly wage rate. The relevant Award is based on a 38-hour week and s 42 requires that the current weekly wage rate be calculated by reference to the 'weekly' rate under the award.

"As at 11.10.06, the date on which Mr Compton's claim commenced, that rate for a carpenter was $695.02 per week. [87] In respect of Mr Compton's average weekly earnings, s 43 of the 1987 Act requires the rate be calculated in such manner as is best calculated to give the rate per week at which the worker was being remunerated."

"In the case of a worker in Mr Compton's circumstances, what is required is a determination of the commercial value of his labour: Hill v Bryant [1974] 2 NSWLR 423 at 428.

"That determination can be made by either calculating the worth of his or her work to the business, or by calculating what it would cost the business to employ someone else to do his or her work: J & H Timbers PL v Nelson (1972) 126 CLR 625 at 631, and Cage Developments PL t/as Monaro &c v Schubert [1981] 2 NSWLR 227.

Matter remitted, only to current weekly wage rate and average weekly earnings to be re-determined.

Appeal costs to worker.

A: Mulcahy Lawyers. R: Bourke Love McCartney Young.

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