Case: Hollis v Vabu Pty Limited [2001] HCA 44 ; (2001) 207 CLR 21
Outcome: referred to
In Hollis v Vabu Pty Limited [2001] HCA 44 ; (2001) 207 CLR 21 at 31-32, to which I was next referred by the applicants, the need for caution in relying on earlier authorities relating to vicarious liability in tort, for the purpose of determining the existence or otherwise of an employment relationship in a business or industrial setting, appears at the threshold of the reasons for joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ. The circumstances of that case concerned a courier business involved in the delivery by couriers of articles on bicycles on the basis of payment of fixed rates for each assignment, and in relation to which the High Court established (by a majority of five Justices to one) the existence of a relationship of employer and employee, contrary to the decision below of the New South Wales Court of Appeal. The following considerations addressed in that majority joint judgment at [48]-[50], to which attention was drawn by the applicants, were found to require the conclusion that: '48. First, these couriers were not providing skilled labour or labour which required special qualifications. A bicycle courier is unable to make an independent career as a free-lancer or to generate any "goodwill" as a bicycle courier. The notion that the couriers somehow were running their own enterprise is intuitively unsound, and denied by the facts disclosed in the record. 49. Secondly, the evidence shows that the couriers had little control over the manner of performing their work. They were required to be at work by 9 am and were assigned in a work roster according to the order in which they signed on.... The evidence does not disclose whether the couriers were able to delegate any of their tasks or whether they could have worked for another courier operator in addition to Vabu during the day. It may be thought unlikely that the couriers would have been permitted by Vabu to engage in either activity. 50. Thirdly, the facts show that couriers were presented to the public and to those using the courier service as emanations of Vabu. They were to wear uniforms bearing Vabu's logo.' The issue here arising is one step removed from Hollis , in that it is not in issue that Messrs Wilton and Cumberland did not have the status of employees per se instead of that of independent contractors. The issues here involved boil down to identification of the employer of the applicants Messrs Wilton and Cumberland, whether being CAO as contended by the applicants or MES as contended by CAO, in the context of MES's function of labour hire. Nevertheless as I have also foreshadowed, the jurisprudence emerging from cases involving directly the issue as to whether an entity conducting a business retained a particular person as an employee, or else engaged that person as an independent contractor, contain judicial dicta which may assist the resolution of those issues so arising in the present context. 28 The issue here arising, as to whether or not a contract of employment was mutually intended to be established between the applicants and CAO, was emphasised by the applicants in any event to fall for determination by the Court objectively, and in that regard at least largely by inference from the conduct of the relevant parties, as exemplified in the following dicta of Gaudron, McHugh, Hayne and Callinan JJ appearing in Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8 ; (2002) 209 CLR 95 at [25] , shortly after the High Court's decision in Hollis : 'Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.' The circumstances in Ermogenous related to the engagement of a minister of religion, and hence were somewhat distant from the industrial context here involved, and in addition there was not present as here the competing element of the existence of a third party. Nevertheless the emphasis there given to the need to take account of the subject matter of a relevant agreement, the status of the parties thereto, their relationship to another, and other surrounding circumstances are factors of present importance. I would add reference to the need for the determination objectively of the mutual intention of the contracting parties, evidence of mere subjective intention being usually of controversial weight. 35 The mutually acknowledged need for caution in placing reliance upon litigated precedents, in the context of deciding if there exists an employment relationship in the circumstances of a particular subsequent case, was emphasised in Hollis , where at [31] of the reasons for the joint judgment of the High Court to which I have already made reference, the following further appears: 'The concession in the Court of Appeal was one as to a proposition (more accurately, a conclusion) of law alone, and not as to the facts on which that proposition rested. In Zuijs v Wirth Brothers Pty Ltd , the same concession had been made in the New South Wales Supreme Court but was held not to stand in the way of this Court hearing argument and, indeed, holding to the contrary on appeal. Moreover, it has not been demonstrated that any substantial prejudice would result to Vabu in allowing Mr Hollis now to argue this point. All the facts necessary for determination of the question were adduced and proved at trial and no new fact is sought to be or needs to be raised. Further, one might have thought that, as a practical matter, there would have been considerable obstacles in the path of any challenge to the finding of a relationship of principal and independent contractor at trial or in the Court of Appeal because it would have been contrary to the prior holding of the Court of Appeal in the taxation decision.' It was asserted on behalf of the applicants that the present case was not an instance '... where the Court needs to focus on all of the persons engaged by [CAO] through contractors or even all the persons engaged by [CAO] through MES', but rather was an instance which 'requires the Court to focus on the circumstances of the two applicants in their interaction with [CAO]'. Nevertheless I did not understand the applicants to distil, by way of any detailed or definitive description, the existence of any material difference between the arrangements made between MES and CAO for the utilisation of the services of Mr Wilton or Mr Cumberland and those of other workers introduced by MES to CAO, for what that might matter. 97 I was referred by the applicants again to Hollis , and to the segments appearing at [47] - [57] of the reasons for joint judgment of the High Court. I have earlier extracted the text of [48]-[49] and part of [50] of that joint judgment, but I need say no more other than to repeat that the issue there was not, as here, the identification of the employer of persons having an acknowledged status as employees, but the identification of their employer in a tortious context. I do not therefore consider sufficient assistance to be available here from further passages in Hollis . 98 The next subject arising is the applicants entitlement to the benefits of their respective employment agreements sought to be recovered from CAO. 99 It was asserted on behalf of the applicants that they were paid as casual employees under the MES agreement, and hence at rates of pay said to be 'significantly less' than the rates that applied to both permanent or casual employees under the 2000 and the 2003 Certified Agreements. Those Agreements came into force respectively on 20 October 2000 for a term of three years and on 12 December 2003 for a further term of three years, and each related to 'employees engaged in production and engineering functions at the Hunter Valley Operation', in the case of the 2000 Agreement, and to 'employees of the company performing production and engineering work' in the case of the 2003 Agreement. 134 The effect and operation of that line of authority may be outlined as follows: (i) the totality of the relationship is to be considered; thus in Stevens , the following appears in the reasons for judgment of Mason J (as he then was) at 24: 'But the existence of control, whilst significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of this Court has been to regard it merely as one of a number of indicia which must be considered in the determination of that question. Other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee.' To that dictum may be added what I have earlier cited at [26] of my reasons from the joint judgment of Wilson and Dawson JJ in Stevens ; (ii) in the most recent of the foregoing five authorities above recorded ( ACT Visiting Medical Officers) , a Full Federal Court comprising Wilcox J, myself and Stone J in a joint judgment applied the principles emerging from analogous authority for the purpose of characterising relevantly the visiting medical officers engaged by public hospital authorities to provide medical services to public patients; the Full Court observed the practical realities inherent in the circumstance that in the course of their treatment of patients undertaken at the hospitals, the visiting medical doctors 'moved seamlessly between patients in the two groups' , being both private and public patients, as an integral part of the businesses that each of those doctors individually carried on; (iii) in BHP Billiton the person at the centre of the dispute had been employed by BHP Billiton and its precursors as a locomotive driver until he was made redundant in 1999; in 2001 he applied successfully for employment with a labour hire company then supplying contract drivers to BHP Billiton; from that time to 2004, and while directly employed by the labour hire company but working at BHP Billiton, he applied for advertised direct employee position with BHP Billiton on four separate occasions but was unsuccessful each time; the Union alleged that BHP Billiton had unreasonably refused to employ him, and that he was in any event jointly in the employ of entities inclusive of BHP Billiton; declaratory relief was sought to that latter effect, as was also an order in any event that such person be employed by BHP Billiton on an award; in the course of decision-making the Industrial Appeal Court of Western Australia was required to consider the Union's case that the person concerned was an employee of BHP Billiton according to ordinary concepts; the Union submitted that the correct approach to deciding the question as to the existence or otherwise of an employment relationship was to have regard to the totality of the relationship, citing inter alia in that context Hollis and Stevens . At [114] in the reasons for judgment of Le Miere J, with whose reasons Wheeler J agreed and Pullin J at least substantially agreed, it was observed as follows: 'In Hollis v Vabu and Stevens v Brodribb Sawmilling Co Pty Ltd the High Court set out the common law principles for distinguishing between an employee and a contractor. These principles do not embody a definition of employment as such. They rely instead on a test which involves the consideration of a number of established factors or indicia, some of which are characteristic of a contract of service and others of which suggest a non-employment relationship. The task of the court which must assess the employment status of a worker is to consider the parties' relationship in light of each of these indicia and to determine, on balance, into which legal category the relationship falls. The exercise is not a mechanical one. Rather it is a matter of obtaining the overall picture from the accumulation of detail.' 136 CAO emphasised that the importance of those factors will vary with the circumstances, no single factor being normally determinative, and that a balancing exercise is to be undertaken in relation to all of the relevant factors ( ACT Visiting Medical Officers at [19]-[20], [27] and [30] and BHP Billiton at [114]). CAO pointed out additionally that the fact that a party is benefited by the activities of a person is not a sufficient indication that the person is an employee, pointing thereby to Hollis at [40], where in the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, the following observation was made: 'Thus, by itself, the circumstance that the business enterprise of a party said to be an employer is benefited by the activities of the person in question cannot be a sufficient indication that this person is an employee.'