Case: Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 ; (1986) 160 CLR 16
Outcome: applied
The parties were basically in agreement as to the law to be applied in answering this question. In Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 ; (1986) 160 CLR 16 at 24 Mason J said: 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 .... 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. 13 The cases have identified many indicia, in addition to those to which Mason J referred, that are relevant to the inquiry. See, for example, Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537 at 538 and D &amp; D Tolhurst Pty Ltd v Commissioner of State Revenue (1997) 38 ATR 1001 at 1013-1014. 14 The Magistrate first instructed herself in accordance with the relevant authorities, including those referred to above. She then noted various indicia relevant to the characterisation process. They included that the respondent was a sole operator, had an ABN, sent invoices which included GST, used his own motor vehicle and secretarial facilities without expenses or allowances from the appellant, was at liberty to take other work, worked at home without supervision, and attended meetings with the appellant's clients without the appellant being present. Her Honour also recorded that the appellant did not advise the Tax Office that the respondent was its employee and did not deduct PAYE. Nor was the respondent provided with sick leave, annual leave or superannuation. The Magistrate referred to other indicia, pointing one way or the other. See [16] to [54]. 15 The appellant summarised its complaints about the Magistrate's characterisation of the respondent's work status in three propositions: (a) her Honour was incorrect in deciding that the indicia she relied upon were the correct set of indicia and were exhaustive of the determination of that issue; (b) her Honour ignored or gave little or no regard to concrete written expressions by the respondent of his intentions as to the nature and terms of "the employment"; (c) her Honour gave no weight or no sufficient weight to (i) the nature of the relationship between the parties, including industry practice, and (ii) "implications that should arise as a consequence of the need to give business efficacy to the agreement". 16 In a comprehensive and detailed set of reasons on this issue, covering sixteen pages, the Magistrate dealt with many matters other than those to which she ultimately accorded particular weight, including those the subject of particular complaint in pars (b) and (c) at [15]. Having done so, her Honour announced her conclusion as follows: Taking into account all of the matters mentioned above and considering the matter as a whole, it is clear to me that the respondent worked for the applicant as an independent contractor. The respondent had his own ABN. He charged the applicant GST. The applicant claimed an input tax credit for the GST. The applicant did not [deduct] pay as you go income-tax instalment deductions from the amounts paid to the respondent. The respondent charged the applicant a fixed price for the work. The respondent was given no holiday pay, sick pay, superannuation or workers compensation insurance. The respondent was free to take other work and did including other work from the Salvation Army. The respondent, in my view, was clearly in business on his own account. Notwithstanding that Mr Roberts exercised some control over the overall direction of the project, and the respondent was doing a major job for the applicant, the respondent was not an employee. 17 The Magistrate did not treat the matters recorded in the second to seventh sentences of that passage as a "correct set of indicia". They were the matters that appealed to her as determinative after weighing and balancing a much larger range of indicia, including those relied on by the appellant. On a fair reading of the Magistrate's reasons, it cannot be said that the list of specific matters recorded in the passage quoted at [16] was propounded as "exhaustive of the determination of that question". 18 For the same reason I do not accept Counsel's oral variation of the "correct set of indicia" submission. This was that the Magistrate ticked off the matters on her check list and thus reached the wrong result because the list was incomplete. 19 For the foregoing reasons there is in my view no substance in complaint (a) at [15]. 20 The "concrete written expressions" of the respondent's intentions as to the "nature and terms of his employment" in complaint (b) at [15] were twofold. The first was that in his "Proposal to Develop a Call Centre Application" sent to Mr Roberts on 20 May 2004, he described himself as "Centre Stage Management Development Manager (Tony Riedle)". As to the significance of this title, the Magistrate said: The applicant says that this means that the respondent acknowledged that he was not an independent contractor but that he occupied a position as a designated employee of the applicant. In my view, that reads too much into the title the respondent gave himself. The proposal was to be provided to the Salvation Army. As between the applicant and the Salvation Army, the respondent was on the applicant's team. That was sufficient to explain the respondent's description of his position. The description does not seem to me to indicate that the respondent was holding himself out as an employee. In any event, it would only be evidence of his view at the time. As previously stated, I do not consider the views of the parties, or even their solicitors, to be of significant weight in the context of this case. 41 An understanding of some basic concepts involved in the construction of a computer program assists in understanding the appellant's implied term argument. The following description of the general nature of a computer program is taken from the judgment of Gibbs CJ in Computer Edge Pty Ltd v Apple Computer Inc [1986] HCA 19 ; (1986) 161 CLR 171 at 178-179. A computer program is a set of instructions designed to cause a computer to perform a particular function or to produce a particular result. A program is usually developed in a number of stages. First, the sequence of operations the computer will be required to perform is commonly written out in ordinary language. Next a source program is prepared, usually in a source code which is human-readable. The source code cannot be used directly in the computer, and must first be converted into an object code, which is machine-readable. The program is executed by the computer's central processing unit. See Data Access Corporation v Powerflex Services Pty Ltd [1999] HCA 49 ; (1999) 202 CLR 1 at [4] .