Case: Drake Personnel Ltd and Others v Commissioner of State Revenue [2000] VSCA 122 ; (2000) 2 VR 635
Outcome: cited
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. 163 As I foreshadowed, the submission of CAO on the implications of the authorities identified by Munby J was that his Lordship '... appears to have approached the case in a more conventional way', and seemingly 'to have included the question of "intention" in the mix of issues for considering what the facts actually proved including whether or not there was a contract with anyone at all'. There is in my opinion considerable force in that submission, in the light also of Drake Personnel and Forstaff more recently in Australia. Whilst agreeing with Mummery and Sedley LJJ upon the outcome to the appeal, Munby J parted company with the thrust of what I think may be described as their Lordships' obiter dicta , as Munby J at least implicitly indicated at [80]; indeed Munby J further expressed in [81] 'very serious misgivings about the course on which [such dicta] would have us embark' . 192 I think that CAO is correct in its comprehensive case advanced, in a sense in the alternative, to the effect that the conduct and functions of the respective parties were not otherwise indicative of an employment relationship between the applicants and CAO, having regard to the totality thereof, and having regard in particular also to the criteria apparent from the authorities to which I have already referred, inclusive in particular of Stevens, Hollis, Damevski, ACT Visiting Medical Officers and BHP Billiton , keeping in mind in so doing that it is labour hire arrangements that are here inherently involved. I would acknowledge the relevance and force of all of the factors formulated in [135], each having varying significance without each being determinative in any fulfilment of the need for undertaking a balancing exercise in relation to all relevant factors bearing upon resolution of the principal issue arising as the existence or otherwise of relationships of employment. I would further acknowledge the prospective operation, in cases such as the present, of the principles enunciated generally in Mason and Humberstone , as well as perhaps more specifically in Drake , and additionally of course in Forstaff where reference to and examination of authority is undertaken by way of focus on labour hire arrangements.