Case: Stevens v Brodribb Sawmilling Company Proprietary Limited [1986] HCA 1 ; (1986) 160 CLR 16
Outcome: applied
The applicants cited a number of authorities bearing upon the principles for determination of the existence or otherwise of an employment relationship. The first was the dicta of Wilson and Dawson JJ (of course as members of the High Court of Australia) in Stevens v Brodribb Sawmilling Company Proprietary Limited [1986] HCA 1 ; (1986) 160 CLR 16 at 36-37, the immediate context there being an issue as to the vicarious liability in tort of a sawmiller for its independent contractors as distinct from its employees: 'The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance. Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance.' In the present context however there is no issue arising as to the status of the applicants as employees per se , but rather whether each was employed at the material times by CAO as the applicants contended, rather than by MES as the labour hire agency. It may be accepted that the contractual arrangements in operation as between CAO and MES at the material times are not determinative per se of the characterisation relevantly of the relationship in place between each of the applicants on the one hand and CAO on the other, though such arrangements were not of course irrelevant. 95 It was contended by the applicants nevertheless that indicia as to whether there is an employment relationship found in the reasons for joint judgment of Wilson and Dawson JJ in Stevens at 36-37 should here apply in principle. The appeal raised the issue as to whether a principal is liable for the negligence of an independent contractor on the basis that the activities he was engaged to perform were extra-hazardous. Unanimously the High Court held that the relationship was one of independent contractors. The principal judgment was written by Mason J (as he then was), with whom Brennan J expressed general agreement, and the fifth member of the Court (Deane J) agreed with the reasons for conclusion of Mason J. That authority related thus to vicarious liability in tort, and as I have foreshadowed, may be said therefore to be not operative at least directly on point in relation to the present cause of action. 96 Given the measure of assistance to be gained from that dicta of Wilson and Dawson JJ in Stevens for which the applicants contended, it becomes appropriate in any event for completeness to list what the applicants further contended to reflect an 'overwhelming balance of indicia... in favour of an employment relationship' between the applicants and CAO: (i) CAO exercised, and had the right to exercise, control over the applicants' work and all related matters; (ii) CAO provided and maintained the equipment used in the work; (iii) CAO allocated the applicants to crews and provided them with rosters which indicated when they were required to work; (iv) CAO had the right to dictate the place of work, hours of work and the like; (v) the work did not involve the applicants providing their own place of work or their own equipment; (vi) the work did not involve the creation of goodwill or saleable assets; (vii) the work did not involve the payment by the applicants of business expenses of any significant proportion, nor remuneration without the deduction of income tax; (viii) for all practical purposes, the right to dismiss or suspend the applicants was also exercised by CAO. Nevertheless those indicia are essentially or equally reflective of a labour hire arrangement, except perhaps for (viii) above, which factor carries per se the handicap of the somewhat uncertain notion 'for all practical purposes', and tends therefore to beg the question as to de jure purposes and implications. 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.' 138 Attention was then returned by CAO to what I have extracted above at [139] from the dictum of Mason J (as he then was) in Stevens , and additionally to what preceded the same by the way of following observations of his Honour at [24]: A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it.' In the light of his Honour's observations in Stevens which I have cited both earlier and immediately above, the existence of actual control residing in the entity conducting labour hire operations may not have the same significance in a labour hire context. 139 It is also instructive to retrace the evolution of Australian authority to Drake Personnel Ltd v Commissioner of State Revenue [2000] VSCA 122 ; (2000) 2 VR 635 at [54] , in the context of a pay-roll tax dispute, in which Phillip JA (with whose reasons Buchanan J agreed, as did Ormiston JA whilst adding observations of his own), said as follows: 'All of this is very helpful here, for it indicates that in a case like the present where A makes an agreement with B under which A supplies to B the services of C for the performance of work and A also makes a contract with C for C to perform the work for B, it can be said readily enough, that in performing the work C not only benefits B but is also advancing the business of A, to the benefit of A. It is true that the High Court was considering a statutory definition serving to extend the concept of employment; but it seems to me to follow that a temporary, in accepting an engagement to perform work for Drake's clients, is doing the work as much for Drake as for the client....' Phillips JA referred to a number of authorities, including Stevens, and at [56] continued as follows: 'In cases like these, we are often instructed to stand well back to assess the situation, after first having regard to the detailed facts. Standing back, it seems to me that in this case the subject matter of the contract between Drake and the temporary is casual employment. Once that step is taken, the rest falls into place. Drake can be seen, in a relevant sense, to be employing the temporaries to do casual work, albeit that the contract between the temporary and Drake arises only upon the temporary accepting the offer of work through Drake. The arrangement made with Drake is for casual work: the temporary is to go to the designated work-site and perform work according to the directions of the designated employer for the day; that all flows from the contract made by the temporary with Drake. Tomorrow or next week or next month it will be a different work-site and a different temporary employer, but again that will be the consequence of the temporary accepting an offer from Drake and a contract arising between Drake and the temporary.' His Honour's conclusion on this point was relevantly at [57]: 'Accordingly, if one looks at the matter "from a distance" as it were, the conclusion that the temporaries are employees of Drake according to ordinary concepts of the common law is one which not only can be supported but is I think required: the temporaries are engaged by Drake to perform casual work and the difficulties inherent in this case arise, first, from the very nature of casual work as impermanent and, secondly, from the fact that the contract between Drake and the temporary involves the temporary's doing work for and at the direction of a third party, Drake's own client. But given the contract made by the client with Drake and the contract made by Drake with the temporary, it seems to me perfectly consistent to conclude that the temporary is the employee of Drake in the relevant sense at common law.' 141 CAO submitted that the extent of control in a labour hire context is of less significance than in the normal employment context, and my attention was further drawn to the reasons for judgment of Merkel J in Damevski at [162], where his Honour referred briefly to Mason &amp; Cox at [24]-[29] and Drake Personnel at [55] and observed that the entitlement of an employer to direct a purported contractor is '... relevant in determining whether an employment relationship exists although it is not as important as it may once have been, particularly in a labour hiring agency context'. In such a context, the fact that the client determines the hours of work should not preclude the existence of a contract of employment between a labour hire company and the worker, CAO thus contended and in my opinion rightly. CAO submitted moreover that '[s]ignificantly, the test for whether or not a contract is one of employment is not the "organisation test", which was identified by Mason J in Stevens at 26-29 and Wilson and Dawson JJ at 35-36, and where his Honour indicated at [27]-[28] that he was '... unable to accept that the organisation test could result in an affirmative finding that the contract is one of service when the control test either on its own or with other indicia yields the conclusion that it is a contract for services', because '[that] test does no more than shift the focus of attention to the equally difficult question of determining when a person is part of an organisation such that his wrongs may be imputed to that organisation'. Again of course as I have earlier emphasised, his Honour's consideration did occur in an immediate context of vicarious liability in tort, but nevertheless that dictum provides a measure of guidance in contexts involving issues as to the existence or otherwise of an employment relationship in an industrial setting. 143 CAO submitted additionally that the evidence did not support a conclusion other than that the ultimate legal control over each of the applicants resided with MES, and further that although CAO could forbid the applicants to enter the mine and could restrict their movement on the mine site, that situation was no different from what applied to any person present on the mine site or seeking to enter the mine site. Moreover CAO emphasised that the factor of control was only one factor to be considered in assessing the existence of an employment relationship, and was not a determinative factor; I was referred in that regard to ACT Visiting Medical Officers at [19] and [27]. As to the proposition that a person accepting superintendence or control of another person did not necessarily mean that the person became an employee, I was referred to Queensland Stations Proprietary Ltd v the Commissioner of Taxation [1945] HCA 13 ; (1945) 70 CLR 539 at 552, Stevens at 36 and Ready Mixed Concrete (South East) Ltd v Minister Of Pensions and National Insurance (1968) 2 QB 497 at 526 (MacKenna J); that dictum in Ready Mixed Concrete at 526 included the following: 'A man does not cease to run a business on his own account because he agrees to run it efficiently or to accept another's superintendence.'