Case: Dalgety Farmers Ltd t/as Grazcos v Bruce &amp; Another (1995) 12 NSWCCR 36
Outcome: cited
The applicants emphasised in the course of submissions that the present case did not involve the need for the Court to focus on all of the persons engaged by CAO on its mine site in the Hunter Valley, whether through contractors inclusive of MES, but rather must address the circumstances of the applicants in their interaction with and otherwise in relation to CAO. I was referred to the earlier case of Dalgety Farmers Ltd t/as Grazcos v Bruce (1995) 12 NSWCCR 36 at 46, where Kirby A-CJ (as he then was), with whom the other members of the New South Wales Court of Appeal agreed, observed generally in relation to an issue as to tortious liability of an employer: 'Determining whether employment exists, and if so with which person or organisation, is often a difficult task. It involves the characterisation of the essence of a relationship by reference to given criteria. It frequently results (as cases both in Australia and elsewhere illustrate) in borderline decisions upon which different legal minds, properly instructed, can reach different conclusions.' I would draw attention to his Honour's emphasis above upon the need for 'characterisation of the essence of a relationship' under scrutiny. The context to Dalgety Farmers related to the labour hire of shearers undertaken by an organising entity for pastoralists. 81 Generally as to the significance of the extent of direction and control of the applicants exercised by CAO, the applicants submitted that the Court was requested to look at all of the circumstances of the employment relationship, and in particular whether the label given to it reflects the reality, as well as the significance, of 'the control test' in any analysis of the employment relationship. CAO pointed however to the need to bear in mind that the contexts of the judicial observations for instance in The Queen v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Limited [1952] HCA 10 ; (1952) 85 CLR 138 at 151 (Dixon, Fullagar and Kitto JJ) and Dalgety Farmers were not related to labour hire arrangements, contrary of course to the situation here. That different context was said to reduce the reliance that may be placed on those judicial observations. That passage relied upon by the applicants in The Queen v Foster joint judgment at 151 was as follows: 'For, if in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, a clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual.' It was hence said by CAO that the circumstances in which persons are engaged to undertake work have developed materially since those general observations were made, particularly in relation to the evolution of activity of labour hire agencies. Thus in terms of control, it was further said by CAO that the relevant inquiry is not confined to the party that has exercised control, but extends to the circumstances by which control came to be exercised, including any contractual allocation of control by an employer to that other party, and any contractual undertaking by an employee to accept control from such other party. 90 For largely the foregoing reasons in summary, the applicants submitted that it was CAO rather than MES which had the right to control and did in fact control the applicants, and in that regard, [CAO] assigned work to and supervised the work of the applicants on a daily basis. It was emphasised that if there was 'anything amiss with the performance of the Applicants it was CAO who detected this and took the practical steps to remedy it', and further that '[t]he supervision by MES was only notional in matters such as discipline and safety because for all practical purposes decisions in those matters were taken by [CAO]', and yet further that 'MES [did not] have any power to direct the Applicants to work at a different site'. In that context, the applicants also contended that '[w]hile the control test is no longer the sole test of unemployment, it is still highly significant and may even be determinative in a case like this', pointing thereby to the following dictum , which I would observe nevertheless to be obiter , as well as inconclusive, of Clarke JA in Dalgety Farmers at 51: 'But, where the only question is whether a worker is employed by A or B, there is much to be said for the view that the question should be answered solely by reference to the control test. It is unnecessary to pursue the question further in the present case where the indicia, including the legal right of control, point so overwhelmingly in favour of... the employers. However, where the factors are more balanced, the control test could well be seen to provide, in the limited situations I am discussing, the determinative test.' 91 It was emphasised further by the applicants that they 'were fully integrated into [CAO's] operations', in that '[a]ll of the workers on each crew, including the Applicants, were engaged to perform similar duties and subject to similar rules of employment... [and] were subject to essentially the same supervision... [and] received the same information as they worked in the same environment and the safety requirements were the same for each crew member'. Moreover it was asserted by the applicants that the circumstances of the case 'demonstrate that the arrangements for payment of wages and other "paper matters" were outsourced by [CAO] to MES'. I would think that description to be contrary to the reality of the relationship between MES and each of the applicants, and indeed that the exercise of the somewhat basic function alone of paying the applicants' wages tends against the viability of the applicants' case, the payment of wages and the obligation so to do being normally of the essence of an employer's obligation the subject of a contract of employment in relation to an employee. Counsel for the applicants drew attention further to the circumstance that '[w]hile the Applicants were remunerated by MES on an hourly basis for the work they performed with premiums for penalty payments, [CAO] paid to MES an hourly rate for the work done by the Applicants for [CAO] with a similar scale of premiums when the penalty payments were paid by MES to the Applicants'. 109 It was contended by CAO at the outset that in order to constitute an employment relationship, the asserted parties thereto must be in a contractual relationship. So much was said to be at least implicitly exemplified by what appears in Byrne at 421 and 436. Given the variety of ways that a relationship of employer and employee may come about, formally or informally, the effectuation or otherwise of an employment relationship will not necessarily be readily cognisable, as the discussions for instance in Ermogenous at [24] and following under heading 'Intention to create contractual relations' exemplify and in Dalgety Farmers at [4] imply, see also the reference of Kirby A-CJ at [5] of Dalgety Farmers as to the need '... to look to the circumstances of the engagement and to ascertain who it was that offered employment, and whether the worker accepted that offer' .