EMPLOYSURE LAW

CPD SEMINAR WEDNESDAY 26TH JUNE 2024

LEVEL 6 180 THOMAS  STREET,

SYDNEY, NSW, 2000

1. Employsure Law is a specialist Fair Work and Employment Law practice involved in various fields of workplace legal endeavour including unfair dismissals, general protections and adverse actions, Award and Enterprise Agreement underpayment claims and increasingly sexual harassment and discrimination claims.

2. The purpose of this paper is not to examine closely the Evidence Act, basically a codification of the common law rules which have developed over centuries, but to consider some of the practical aspects needed by employment lawyers in the conduct of the preparation, running and settlement of cases.

3. Traditionally the best practitioners adept in the rules of evidence has been lawyers working in the criminal courts. Employment lawyers are not so good . There is good reason why the former are so skilled in laws relating to evidence because the accused could be subject imprisonment or large monetary penalties or in an earlier atavistic age capital punishment. The reason why employment lawyers have traditionally not been so skilled is because over the past century or so in Australia the statutes dealing with industrial matters generally have had a provision such as section 591 of the Fair Work Act which reads;

“ s.591 The FWC is not bound by the rules of evidence and procedure in relation to a matter before it ( whether or not the FWC holds a hearing in relation to a matter).”

4. Under the New South Wales Industrial Relations Act

Rules of evidence and legal formality

163 RULES OF EVIDENCE AND LEGAL FORMALITY

(1) The Commission–

(a) is not bound to act in a formal manner, and

(b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and

(c) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

5. Similar provisions exist in other state industrial jurisdictions when such industrial commissions sit as arbitral bodies, that is when they are creating new employment rights. Although not being bound by the rules of evidence does not mean such rules are flaunted or ignored. The rules of evidence are generally applied as a matter of fairness in order to achieve ‘good conscience and equity’ between the parties.

6. However, when such bodies are exercising a judicial function, that is enforcing rights between the parties or imposing penalties on a defendant, the rules of evidence need to be more strictly applied. When one considers the potentially large monetary sums and penalties which could be ordered for breaches of the Fair Work Act or industrial instruments a stricter application of the rules of evidence is required.

7. Some years ago the former but soon to be revived Industrial Court of New South Wales in Kirk v Industrial Court of New South Wales [2010] 239 CLR 531 was found by the High Court that when the Industrial Court convicted an employer for a breach of s.15 of the Occupational Health and Safety Act it had failed to apply the rules of evidence leading to jurisdictional error and its decision set aside.

8. Having so started on the topic what are the practical concerns of an employment lawyer in preparation for a hearing of the type of matters mentioned above. Firstly, one must determine whether the claim or a defence to the claim is not only arguable but also able to be proved. The arguable part relates to the law which applies to the pleaded action and the provable part is whether there is admissible evidence to support the pleadings. To commence proceedings or to make assertions of fact for which there is no reasonable basis or simply cannot be proved may be a form of professional misconduct and may be seen to be a vexatious institution of proceedings or an  unreasonable act which could attract a costs sanction under s.570 of the Fair Work Act.

9. In Clyne v NSW Bar Association [1960] 104 CLR 186 a barrister was struck off the roll for instituting a baseless prosecution and for making extravagant allegations in his opening address for which there was no supporting evidence.

10. These matters are established by a good knowledge of the relevant law and taking a detailed proof of evidence from the client.

11. In doing those two things one is able to draft the pleadings initiating the action and the pleadings in defending it.

12. In taking the proof of evidence it is both efficient and sound practice to ask questions of the client and/or a witness so that the proof of evidence can easily be made into an admissible  statement of evidence or affidavit to be used in proceedings.

13. In preparing such a statement  one should always remember that at the outset the evidence needs to be relevant to an issue to be determined and that the witness must be able to give direct evidence of the fact to be proved. Direct evidence firstly can be what the witness knows and can assert from his or her own direct experience. Basically, such experience comes from the five human senses of sight, sound, smell, touch or taste. Primarily evidence is what one saw or what one heard. Unless one can produce the  document it is difficult to prove ( but not impossible ) what one read or what the document contained, as one’s memory of what was in the document may not be the best evidence although in certain circumstances it may be. For example the document has been lost or destroyed secondary evidence of its contents may be admissible.

14. In preparing a statement from a witness all relevant documents which that witness may have should be gathered and if necessary attached to the statement. Such documents might be a letter of offer, a written contract of employment, written variations to the contract, pay and/or or tax records, statutory leave records, the applicable industrial award or enterprise agreement, job or position descriptions, general policies and procedures of the workplace, relevant emails to and from managers and  those whom they manage, internal disciplinary reports, notices to show cause, letters of termination.

15. In some underpayment of award provision cases one firstly needs to be satisfied as to the correct award coverage by considering the nature of the employer’s business or the calling of the employee compared to the scope of the award coverage. Some areas of employment could potentially be covered   by more than one award. One needs to apply the principles of award interpretation of the coverage of the award to industry in which the work is performed or the nature of the actual work being performed. The same task can occur if there is doubt as to the correct award classification which best fits the work performed by employee. A good way to find what is the correct award  coverage or classification is to pose the question what is the major and substantial purpose of the employment. (See Justice Sheldon’s comments in Ware v O’Donnell Griffin Pty Ltd (1971) 71 AR 18.) An old case in the High Court, R v Central Reference Board and others ex parte Thiess (Repairs) Pty Ltd [1948] 77 CLR  123 considered the question in which industry a particular employment fell.

16. In the running of a case the solicitor should take detailed notes of the evidence given by each side’s witnesses. I have been in a case where the parties disagreed with aspects of a witness’ evidence  as recorded in the transcript. Evidence had to be called from each side’s solicitor as to their notes and recall of the what the witness stated. The transcript reporter’s notes or the tape or digital recording of the evidence also might be necessary to examine.

17. Another important matter of evidence are the discussions held by the parties’ lawyers either on the question of the agreed procedure of running a case or the negotiations leading to its resolution. In this regard solicitors need to keep accurate notes of what is stated each to the other. It is also prudent to follow up a telephone conversation with one’s opponent with an email confirming what has been stated or agreed. Should an email stating such things not be responded to there is an inference that what is stated in the email to which no response has been given is correct.

18. Many years ago I was also in a case where a dispute broke out as to what documents had been produced on a notice to produce. When producing documents it is more than prudent to make a copy and/or keep a list of the documents produced which may need subsequently to be verified on oath. In that case the solicitors had to give evidence as to whether a notice to renew an insurance policy was in the discovered documents.

19. In negotiations to settle a case detailed notes of the offers and counter-offers are vital and any terms of the offer other than just the monetary amounts. An example which comes up from time-to-time in employment cases concerning settlement is the tax treatment of the settlement monies. For example, if a case settles for a gross sum it should be made clear that the appropriate tax will be deducted from the sum before it is given to the worker.

20. I have been in another case where there was a dispute as to the terms of the settlement reached by the solicitors. An unedifying process then had to take place of both solicitors being put in the witness box to be examined about their notes and recall of the negotiations.

21. Cases can sometimes settle at mediation or hearing and be subject to a Deed of Release to be prepared by one party. Upon receipt of the Deed the other party might object to terms of the Deed containing matters which were not discussed or agreed at the time the monetary amount was agreed. Notwithstanding the dispute about the terms of the Deed the question is often asked has the case settled and can the settlement be specifically performed or enforced? These considerations can be looked at in the case of Masters v Cameron [1954] 91 CLR 353. To avoid such problems it is best to spell out in great detail the terms of the settlement and best to have a draft Deed of Release available to read or to show to the other party to avoid such disputes of an evidentiary nature.

22. These are just a couple of practical examples of the importance of evidence and proof of matters in employment law cases.

Jeffrey Phillips, SC

State Chambers,

Sydney

Case: Moffet v Dental Corporation Pty Ltd [2019] FCA 344
Before: FLICK J
Keywords: Independent Contractor or an Employee- ABN, Tax, No term of direction in Contract?

Case Note:
This case concerns an applicant, Dr David Moffet, a registered dentist whom operated a dental practice in Parramatta between 1987 and 2007. The respondent, Dental Corporation Pty Ltd, bought that dental practice and executed agreements with the applicant that were:

• The Dental Practice Acquisition Agreement (sell of practice), and
• a Services Agreement with the applicant to provide dental service for a 5-year period.

The applicant is seeking primarily relief under the Fair Work Act 2009 (Cth) (“FWA”) in respect to long service leave and superannuation entitlements. To be entitled for such relief, the Federal Court had to determine the primary issue on whether or not the applicant was an employee or an independent contractor to the respondent.

Applicant’s Argument (Summarised)-

• The applicant is not an independent contractor, but rather an employee of the respondent. Further, he submitted the following; there was no control over the operation of the business, the dental work performed was subject to the supervision and control of the respondent, he was always held out by third parties to be a representative of the respondent and at all times he was remunerated for the performance of work by the respondent. [1]

Respondent’s Argument (Summarised)-

• The applicant was not an employee, but rather an independent contractor in respects to the Service Agreement. The respondent argued, there was no real control over the manner the applicant had performed the services he had agreed to provide and he heavily participated in the Goods and Services Tax (“GST”) system. For example, the respondents paid the applicant’s fees in full without deduction of the income or other taxes, [2] and a separate Australian Business Number (“ABN”) was used by the applicant to claim tax deductions due to his inability to generate profit. [3]

Ratio Decidendi – Federal Court
With respects to the financial arrangements, the Federal Court found the applicant participated in the GST system quite extensively. The applicant’s participation included the promotion of his dentistry services online, and used a separate ABN to claim deductions on his tax return due to his inability to produce profit for the respondents.[4]  With respects to the Service Agreement between the parties, there was no term of direction in relation to the hours that must be performed by the applicant, the days he was required to work, the nature of work to undertake, or the holidays he could take.[5] This was confirmed by the applicant during the cross-examination.

Ultimately, the Federal Court held, the applicant was an independent contractor. As an independent contractor, he cannot claim any leave entitlements because he falls short of the definition of an ‘employee’ prescribed by the FWA legislation. On the other hand, the applicant was entitled to superannuation contributions under the Superannuation Guarantee Act s 12 (3). He was entitled to superannuation contribution because he is a person whom worked under a contract (Services Agreement). [6]

Wazeem Kadir

Fifth Year Arts and Law student,

Western Sydney University

This piece is taken from Workplace Review Summer 2011. Available from Thompson Reuters.

In this paper I review Infomax International PTY Ltd v Clarius Group Ltd (No 2) [2011] FCA 934. View “Jeffrey Phillips on the case”

Deva v University of Western Sydney.

ON CALL INTERPRETERS AND TRANSLATORS AGENCY PTY LIMITED v COMMISSIONER OF TAXATION (NO.3) [2011] FCA 366 (13 APRIL 2011)

Justice Bromberg has provided a useful summary of the applicable law in relation to the common dispute as to whether a particular person is an employee or an independent contractor.  This case involved a challenge by On Call Interpreters and Translators Agency Pty Limited (On Call) against  a finding by the Commissioner of Taxation that its interpreters and translators were properly characterised as employees. As a consequence of which On Call should have paid the superannuation guarantee charge on the remuneration it had paid. In reaching his conclusion, Justice Bromberg traversed the major authorities and tests established by the High Court and other senior courts. He supported the need to go behind the label parties may expressly place upon their relationship in order to determine its proper legal characterisation. He referred to the colourful language Justice Gray  adopted from one of the senior counsel( Michael Black  QC) in  Re Porter; Re Transport Workers Union of Australia [1989] FCA 226; (1989) 34 IR 179 at 184  where he said that:

“The parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognises it as a duck.”

Continuing  the analogy  drawn from the animal kingdom, he referred to Lord Wedderburn’s multi-factorial test of looking at the whole picture as the ‘“elephant-test” – an animal too difficult to define but easy to recognise when you see it.’(The Worker and the Law, (3^rd Edition, Penguin Books Limited, 1986 at 116) at [205].  He cited with approval the majority opinion in the High Court in  Hollis v Vabu . He said the distinction between an employee and an independent contractor is “rooted fundamentally” in the fact that when personal services are provided to another business, an independent contractor provides those services whilst working in and for his or her own business, whereas an employee provides personal services whilst working in the employer’s business [207].  Justice Bromberg stated that an independent contractor when providing personal services will be typically “autonomous rather subservient in its decision-making; financially self-reliant rather than economically dependent upon the business of another; and, (as I have said), chasing profit (that is a return on risk) rather than simply a payment for the time, skill and effort provided.” Whereas, an employee seeks the security of fixed and certain remuneration  nor desire in the exposure to the risk of loss in return for a chance of profit [214]-[215].

In reaching his conclusion, Justice Bromberg does not ignore the so-called   “control test,” however sets out a detailed assessment as to what constitutes a business and what constitutes working within one’s own business.  He usefully identifies the relevant indicia of what distinguishes  an independent contractor from an employee.

In this case, one of the difficulties for On Call was Justice Bromberg’s criticism that the few employees it called as witnesses ,out of 2,500 people engaged , were not agreed to be a representative of the whole.  Of the seven called, five were interpreters and two were translators.  Justice Bromberg found that the two translators were in their own business, whereas the interpreters were not. These findings could  not affect all of the 2,500 employees as each person’s individual circumstances might be different.  On Call lost the case because it was the party which bore the onus that the assessments made by the ATO were wrong.

This case provides further example of the evidentiary and legal burden imposed upon someone seeking to have set aside a decision that a particular individual is or is not an employee.  The tests are reasonably clear as to what has being referred to as “the totality” or “the business” tests.  Each case needs to be looked at on its merits.  It may be difficult to draw conclusions from an alleged representative sample( but see Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201 where the sample called was found to be representative). Courts will not be motivated by speculation, generalisations and extrapolation, such concepts being decidedly unhelpful [224].