[2013] FWC 6715 [Note: a correction has been issued to this document] Note: An appeal pursuant to s.604 (C2013/6269) was lodged against this decision - refer to Full Bench decision dated 4 December 2013 for result of appeal.

[2013] FWC 6715 [Note: a correction has been issued to this document] Note: An appeal pursuant to s.604 (C2013/6269) was lodged against this decision - refer to Full Bench decision dated 4 December 2013 for result of appeal.

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Alan Dick
v
James Voros
(U2013/5511)

COMMISSIONER RYAN

MELBOURNE, 13 SEPTEMBER 2013

Termination of employment - not an employee - bailor/bailee - extension of time.

[1] The Respondent in this matter raises two jurisdictional challenges to the application. Firstly, that the Applicant is not an employee, and secondly, even if the Applicant is an employee the application has been filed out of time and there are no exceptional circumstances which would warrant the Commission granting an extension of time.

[2] As this matter deals solely with two jurisdictional challenges I have had regard to the decision of Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ when they decided the standard of proof of jurisdictional facts on a challenge to jurisdiction in Ship "Shin Kobe Maru" v Empire Shipping Company Inc as follows:

“46. Where jurisdiction depends on particular facts or a particular state of affairs, a challenge to jurisdiction can only be resisted by establishing the facts on which it depends. And, of course, they must be established on the balance of probabilities in the light of all the evidence advanced in the proceedings held to determine whether there is jurisdiction.” 1

The Relationship Issue

[3] The Applicant was a taxi driver who drove a taxi owned by the Respondent. The Respondent contends that the relationship existing between the Applicant and the Respondent is one of bailor/bailee and not that of employer/employee. The Applicant contends that he was an employee of the Respondent.

The Facts of the Relationship

[4] The Applicant who has been driving taxis since 1966 commenced driving for the Respondent in 1996. The Applicant had previously been driving for Mr O’Callaghan who was the owner of a set of taxi plates. In 1996 Mr O’Callaghan leased out his plates to the Respondent and at the same time the Respondent entered into arrangements with each of Mr Callaghan and the Applicant that they would be the drivers of the taxi.

[5] The arrangements made between the Applicant and the Respondent, so that the Applicant drove the Respondent’s taxi, were all verbal. There was no written arrangement between the Applicant and the Respondent.

[6] When the arrangement commenced in 1996 the Respondent’s taxi was driven by the Applicant during the daytime and by Mr O’Callaghan during the night time.

[7] The Applicant and the Respondent shared the takings from the taxi. The Respondent’s evidence was that the takings were shared on the basis of 50% to the Respondent and 50% to the Applicant. The Applicant’s evidence was that the Respondent’s share was 52% of total takings with the Applicant receiving 48%. The Respondent introduced into evidence the trip sheets filled out by the Applicant each day he drove the taxi 2 which clearly show that the sharing of takings was 52% to the Respondent and 48% to the Applicant.

[8] The trip sheets recorded a range of data relating to the use of the taxi, including start and finish times, distances travelled, fares taken, amount spent on fuel, condition of the taxi and the driver’s details which included his ABN.

[9] Whilst the Applicant would actually pay for the fuel, either out of cash takings received on that day or out of his own money, he would claim the amount back from the Respondent.

[10] The Respondent maintained the taxi and kept it registered and in running order, maintained the insurance on the taxi and bore the costs of repairing the taxi if the Applicant damaged it.

[11] When the arrangement commenced in 1996 the Applicant was not registered as a business. The Applicant gave evidence that when ABN’s were introduced (1 July 2000) the Respondent requested that the Applicant supply the Respondent with an ABN. The Applicant complied with this request.

[12] The Respondent did not provide the Applicant with any form of paid leave.

[13] The Respondent did not deduct any tax from the Applicant’s earnings, nor pay any tax on the Applicant’s behalf.

[14] The Respondent did not make any superannuation payments on behalf of the Applicant.

[15] At the commencement of the arrangement the Respondent would put aside $5 per week and pay $250 to the Applicant at the end of the year. The Applicant referred to this arrangement as a rebate of rental. 3 This arrangement ended, apparently at the initiative of the Respondent, in or about 2008.4

[16] The relationship between the Respondent and the Applicant ended on 5 December 2012 when the Respondent advised the Applicant that the relationship was terminated.

[17] However, there is another relationship which is relevant to these proceedings. The Applicant had since 2002 been the tenant in a house owned by Mrs Voros. In 2012 a dispute arose between the Applicant and Mrs Voros over claims made by the Applicant in relation to the condition of the house and over claims made by Mrs Voros in relation to unpaid rent. The Applicant engaged a solicitor to represent him in relation to this matter and Mrs Voros was also represented by a solicitor.

[18] On 29 November 2012 the Applicant was given notice to quit the house he and his family were living in. Mrs Voros, through her solicitors, subsequently made an application to VCAT on 19 December 2012 to have the Applicant and his family removed from the house.

The Respondent’s Case

[19] The Respondent contended in written submissions filed in this matter that:

● The cab was hired to the Applicant, and like a car rental, the authorised operator was the Applicant. This is a hire of a licenced taxi vehicle.

● The percentage of takings was the agreed rental payment.

● The Respondent’s payment of damages to a vehicle is also not indicia of employment.

● The Applicant suffered the commercial risk and had full control over how he wanted to operate the taxi. The Applicant was provided the hire of the taxi and he could use it as he saw fit, operate where he wanted to and for such hours as he saw fit.

● The Applicant was entitled to drive the cab where he wanted, to pick up such passengers as he chose, to obtain work from customers via the mobile phone. His efforts dictated his business returns. He was not on a fixed wage and unlike an employment arrangement, if he did not work, or did not get any customers he received nil for his efforts. His income depended on his receiving fees.

● The Applicant provided his ABN for goods and services taxation. The Applicant had an Australian Business Number and was registered for Goods and Services Tax and had provided those details to the Respondent. There was no point in doing that if he was an employee. The provision of taxation invoices is a strong indication that the arrangement was that of a sub contractor.

● He provided his own uniform/ clothes which no doubt were required by the taxi company.

● He was the principal of the business and any goodwill was the Applicant’s as he received what work he was able to through his mobile phone.

● It is not suggested by the Applicant that there was any control of his activities. In this case there is no such control. The Applicant’s emolument depended on his actions. He was not subject to control by Mr Voros, he hired the taxi, used it as and when he saw fit, was not directed how, when or where to get fares.

● He not once sought, nor obtained, any sick pay nor holiday pay.

● He did not have weekly PAYE taxation deducted, nor was he paid superannuation or holiday pay.

● The relationship is one of bailment, the Applicant is not an employee nor did he receive payment under a contract of labour.

● It is therefore submitted that the Applicant was not an employee and the Application is not within the jurisdiction of the Tribunal.

[20] The Respondent gave evidence on his own behalf in support of the above contentions.

The Applicant’s Case

[21] The Applicant contended that when the relationship between the Applicant and the Respondent was viewed as a practical matter the conclusion was that he was an employee of the Respondent. The Applicant contended that there were several factors which supported this conclusion whilst also acknowledging factors which were either neutral or which may point more strongly towards an independent contractual relationship.

[22] In support of the contention that the Applicant was an employee, the Applicant contended that:

● He had no ability to sub-contract or delegate work.

● He was paid by sharing the income of the taxi with the owner.

● The Respondent owned the vehicle, tools and other assets and provided repairs to the vehicle and maintained the insurance and registration of the vehicle.

● All commercial risk was taken by the Respondent and the Applicant merely drove the vehicle and gave the Respondent, the share of profits as agreed.

● The Respondent had full control over the work and who could drive the vehicle.

● The Applicant was provided with Respondent created tax invoices for six ( 6) years.

● At no stage have there been any quotes, invoices, tools equipment or risk provided by the Applicant for the business.

[23] The Applicant further contended that during this 16 year period:

● He had worked exclusively for the Respondent. No other work was taken by him during the period;

● He had always worked the ‘day shift’. This shift started at 5 am and finished at approximately 4 pm;

● He usually worked 6 days a week, and at times 7 days a week. From June 2010, the Applicant worked 7 days a week.

● That as a practical matter he was working for the business of the Respondent and the relationship was characterised by the sale of his labour to the Respondent.

● He also understood that his WorkCover premiums were paid by the Respondent on his behalf.

● He did not generate goodwill as an independent business but rather as a part of the Respondent’s business.

● He did not provide his own tools or equipment, relying instead exclusively on the vehicle of the Respondent.

[24] The Applicant contended that the following factors were neutral:

● The 48/52 split of fares.

● The form of the payment of fares and the arrangements for reconciling the split of the fares between the Respondent and himself.

● The taxi-cab remained at the Applicant’s house for the most part of the time he worked for the Respondent.

● He supplied his own uniform.

● The Respondent did not pay contributions to superannuation on his behalf nor did the Respondent deduct tax from his remuneration.

● The Respondent did not pay for sick leave or annual leave.

● He did not take much time off work, however, if and when he took days off, the Respondent would arrange for the car to be picked up by another person or driver.

[25] The Applicant agrees with the Respondent that there was no written bailment agreement between the parties. The agreement was, from the start, verbal. Notwithstanding, the fact of an oral agreement, or otherwise, is not determinative of any particular relationship. It is the substance of the relationship which is important.

[26] The Applicant states that shortly after dismissing him the Respondent provided him with copies of ‘tax invoices’ back dated for a period of 6 years from January 2007 to September 2012 and setting out the remuneration of the Applicant as taxi-driver over this period.

[25] The Applicant states that at no time had he provided the Respondent with invoices for the work he did in driving the Respondent’s taxi, and whilst the Applicant conceded that had ‘tax invoices’ been prepared by himself over the relevant period, it might be indicative of an independent contractual relationship he in fact never prepared or issued such ‘tax invoices’.

[27] The Applicant contends that the following factors may point more strongly towards a relationship of independent contractor and whilst he had in fact worked exclusively for the Respondent over 16 years, he was not, nor did he believe, he was barred from working for others during such period - notwithstanding there may have been an entitlement to do so, this question was never tested because he was content to work only for the Respondent.

[26] Whilst the Applicant conceded that he has an Australian Business Number and that he carries a business card which bears his name rather than that of the Respondent which advertises his services to the world at large and that his business card - he strongly contended that there had been an employment relationship between himself and the Defendant and that he had worked for the respondent as a taxi driver for the Respondent since 1996 giving 16 long years of continuous and loyal service which he had strongly believed that would continue until he retired.

[28] The Applicant gave evidence on his own behalf in support of the above contentions.

The Issues to be Considered

[29] Both the Applicant and the Respondent took me to a range of authorities which support their respective contentions. The respective cases presented by both raise a number of issues which I intend to consider.

Can a taxi driver be an employee?

[30] In De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd & Ors v Commissioner of Taxation 5 (De Luxe v Yellow Cabs) Hill J identified the situation in relation to the Victorian taxi operator in that matter as follows:

“One applicant operates in Victoria.

Black Cabs Combined Limited (“Black Cabs”) owns and operates in Melbourne a taxi communication centre under the authority of the Victorian Taxi Directorate for the receipt and dispatch of bookings to drivers of taxis operating within that network. The fifth applicant, Vermont Autogas Pty Limited (“Vermont”), manages a taxi fleet comprising 23 vehicles, operating them through the Black Cabs network.

Vermont enters into a written agreement with its drivers. The agreement is in the form of a lease of a vehicle in consideration of a rental payment. In addition to various commercial terms, the agreement provides in clause 5:

‘Subject to the provisions of this Agreement the Lessee -

(a) shall have the control of the vehicle including the running and management thereof during the periods referred to in Clause 1 above.

(b) shall not be subject to any instructions or directions by the Lessor except those requiring observance of the conditions of this Agreement;

(c) shall use the vehicle for the carriage of passengers and luggage in accordance with the provisions of any act, Regulations or By-Laws from time to time relating to Taxi Cabs or Private Hire Cars (as the case may be); and,

(d) shall use the vehicle at such places as he in his absolute discretion shall deem fit.’

Vermont has approximately 130 drivers on its books of which approximately 120 would have driven in a three month period. Fifty of the drivers drive five or more shifts a week. The remainder of drivers are casuals. There is a high rate of turnover.

Payment is made to Vermont by drivers of 50% of the meter takings. Of this amount, 20% is allocated to the vehicle, and the balance to the license. State rental tax is paid on the amount of monies paid by drivers in respect of the car, but not the license. Because payment by the driver to Vermont is made by reference to the meter takings the driver completes a work sheet showing, inter alia, the metered fares, eg flag fall, distance units, wait units, extras, end time, paid kilometres and total kilometres travelled. Refuelling costs and the cost of car washes are deducted. Where Cabcharge or credit dockets are received, the driver’s share of the takings is the cash component and, if necessary, the Cabcharge or other credit amount would be reimbursed in cash.

Taxi legislation requires that drivers wear uniforms. Black Cabs also has a code of conduct which it requires of network drivers. As between Vermont and drivers, it is left up to drivers to comply with their obligations under legislation and Black Cabs’ code of conduct.

There is no industrial legislation operating in Victoria regulating taxis so that no payments are made for sick leave, downtime, holiday pay or long service leave. Drivers who have driven with Vermont for more than two months are allowed a rebate of rental of $5.00 per week. This amount is accumulated and paid to the driver in a lump sum. In the event of an accident, the driver is required to pay a $100 excess.

Except as stated, there is no relevant difference between the arrangements operating between Vermont and its drivers and those operating in New South Wales.”

[31] Hill J posed and considered the following question:

“ARE THE DRIVERS EMPLOYEES AS SUCH?

The critical issue in the present case is whether the drivers are within the ordinary meaning of the term “employees”.

A person will only be an employee where there is a contract between that person and another, who is the employer, for the performance of work. If the sole contractual arrangement between a driver and an operator were for the use of the taxi (ie a contract of bailment) there could be no employer-employee relationship.

The usual question which arises in disputes of the present kind is whether the contractual relationship between two parties is one of employment or whether the person alleged to be an employee is in truth an independent contractor. The case law has thrown up a variety of judicial approaches and it may fairly be said that consistency in approach is often lacking.” 6

[32] After considering a number of cases which dealt with this question Hill J concluded that:

“What will be required..... is a process of weighing up the competing factors.

The factor in the present case, which most tells against the relationship of drivers and operators being one of employment, is the fact that the operators agree with the drivers to grant use of the taxi by way of bailment. It would, in theory, be possible for there to be found to be a bailment of the vehicle to the drivers as well as a relationship of employment between the operators and the drivers, but just as the fact that an employee will not ordinarily be required to provide his or her tools so it would be most unusual for an employee to be required, not merely to provide his or her car to drive, but to obtain possession of that car under a contract which provides that the driver will pay a consideration for the bailment.

There has been a long history of case law which has examined the relationship of taxi owners and taxi drivers. While that case law is not determinative in that there may be a need to consider special matters which may bear on the outcome of each case, that case law does provide a guide to the question whether the relationship in each of the present sets of circumstances is properly to be characterised as one of employment.” 7

[33] Hill J then went on to consider the case law in relation to both the employee/independent contractor dichotomy and the case law on bailment as it related to taxi drivers. In his consideration of the case law on bailment Hill J considered a number of cases including the following:

“Sheppard J, a judge with a long experience in industrial matters, when sitting as a judge of the Supreme Court of New South Wales in Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties [1975] 1 NSWLR 346 accepted, without question, that the relationship in NSW between owners and drivers was one of bailment, not employment. His Honour said (at 347-348):

‘Before proceeding, I should say what is no doubt well known, namely, that in most cases drivers of taxicabs owned by other persons are not employees of such owners, but are bailees of the cabs they drive. I refer, inter alia, to Smith v General Motor Cab Co Ltd [1911] AC 188 at p 192 and to Dillon v Gange [1941] HCA 5; (1941) 64 CLR 253....the relationship of master and servant does not exist between the owner of a taxicab and a driver thereof...’”

And:

“Reference is made in the course of the judgment in Taxiway to Emjay Motors Pty Limited v Armstrong (unreported, Supreme Court of Victoria, 24 August 1995). In that case, Hedigan J, of the Supreme Court of Victoria, refused to overturn the finding of a magistrate that the owner of a taxi was vicariously liable to a third party for damage caused by the negligence of a taxi driver, holding that that finding was reasonably open. The case is not without difficulty. It seems that the magistrate took the view that the agreement of lease between the owner and the driver if not a sham was “an artifice”. Precisely what the difference would be between a sham and an artifice is not clear to me. If the agreement was not a sham then it operated in accordance with its tenor as a bailment. If the agreement was a sham, then it was a disguise for some other agreement, presumably a contract of employment. But there is no half way position.”

[34] In De Luxe Red and Yellow Cabs, Hill J concluded as follows:

“CONCLUSION AS TO THE CHARACTER OF THE AGREEMENTS

In my view, reinforced by the preponderance of authority to which reference has been made, the agreement between the operators and drivers in each of the present cases was one of bailment and not one of employment. Although no single factual matter is determinative, it is the cumulative weight of all the facts which leads me to this conclusion.

First, the driver pays the owner and not the other way around. Of course, where the arrangement calls for a division of the gross fares, it can be said that a payment of 40% to the owner is no different than the owner paying 60% to the driver. Nevertheless, form is not wholly irrelevant. While the fixed payment method more clearly is marked as a bailment, than the gross percentage of meter method, I do not think that ultimately a distinction should be drawn between them.

Second, where there is an agreement in writing (as in Perth and Melbourne), or implied by legislation (as in NSW), that agreement is one of bailment and not specifically of employment. Indeed, in NSW, the relationship of employment is expressly negated. It is not suggested that the negation of employment was a sham. Further, while the label which the parties use to describe their relationship is not necessarily determinative of the true character of the relationship, where it is not suggested that the label is a sham, it should be given effect to.

Third, although some control is exercised by the operators over the drivers, that control is only such as is necessary to ensure compliance with legislation concerning taxis rather than such as to signify an employment relationship. There is an element of control exercised as well by the network operators, to their own drivers as well as to the drivers of other. But that control is only such as is necessary for the running of a network, it does not signify an employment relationship. Disciplinary steps, where taken, are taken by the networks as networks rather than the operators, and where the operators are members of the network, the disciplinary action stems from the network relationship rather than from an employment relationship.

Drivers are free to obtain work as they wish, and in fact do so, often utilising mobile phones. As well, drivers will pick passengers up from the streets, or from ranks. There is no compulsion on the drivers to use the network, although clearly it will be in the interests of drivers to do so.

Drivers provide their own change, and directories, pay for the petrol consumed and the cost of keeping the cars clean, (on night shift) except in the case of Mr Meredith who cleans the cars himself. In some places drivers pay additional insurance, premiums; in all States, subject to insurance, drivers are required to pay for damage to vehicles which the driver causes and are obliged to return the vehicles in the condition in which they receive them. Sometimes driver are required to pay an additional amount for kilometres travelled. In the event of a breakdown, the drivers are entitled to some reimbursement of amounts which they pay for the hire, again a matter inconsistent with employment.

It is only in NSW that industrial legislation requires payment of long service leave, sick pay and workers compensation premiums. While these matters support in that State an argument in favour of employment, the industrial legislation must be viewed against the background of the Yellow Cab decision in 1930 and the many subsequent determinations thereafter in which it has been accepted that the relationship is one of bailment and not employment. In all States stamp duty is exigible on the basis that there is a bailment relationship between owner and driver, a matter not conclusive, but nevertheless supportive of the applicants’ case.

I would, accordingly conclude that the relationships existing between all applicant operators and their drivers are properly to be characterised as relationships of bailment, and not as relationships of employment. Thus, in no case is it correct to say that any of the applicants pay amounts to persons who are “employees” as such, when payments are made to drivers. On the contrary, each of the drivers with which the present applications are concerned carries on his or her own business rather than being a person engaged as an employee in the business of the applicants.” 8

[35] On appeal a Full Court of the Federal Court in Commissioner of Taxation of the Commonwealth of Australia v De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd & Ors 9 upheld the decision of Hill J. The Full Court limited its consideration of the matter to the position in NSW as “(b)y agreement of the parties, the argument on appeal was confined to the position in New South Wales, it being common ground that the position of the respondents in other States did not differ, in principle, in any material respect.”

[36] The Full Court after considering the NSW legislation and the Contract Determination made under it then went on to say:

“In Federal Commissioner of Taxation v J. Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227, it was held that the relationship between a company presenting radio plays and the artists it engaged was that of employment and not that of independent contractor, so that the fee paid to the artist was “wages” for the purposes of the Pay-roll Tax legislation.

Latham CJ said (at 233):

‘Reference was also made to the definition of a servant in the American Restatement of the Law, vol. I ., Agency, p. 483: ‘A servant is a person employed to perform service for another in his affairs and who, with respect to his physical conduct in the performance of the service, is subject to the other’s control or right to control.’ This definition is in accordance with our law. The Restatement proceeds to set out under nine headings various matters of fact which are considered in determining whether one acting for another is a servant or an independent contractor. The decision in a particular case must be determined by a consideration of the facts of that case. The circumstance that a particular fact, absent in that case, was present in another case, should not necessarily lead to contrary conclusions in the two cases. In the present case I regard as the most important and as a decisive element the matter of fact stated in (a) in the Restatement - ‘the extent of control which, by the agreement, the master may exercise over the details of the work.’.” 10

The discussion in the Restatement of the Law of Agency 1933, vol. 1, at 483, of “Who is a Servant” is as follows:

‘S 220. DEFINITION.

(1) A servant is a person employed to perform service for another in his affairs and who, with respect to his physical conduct in the performance of the service, is subject to the other’s control or right to control.

(2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:

(a) the extent of control which, by the agreement, the master may exercise over the details of the work;

(b) Whether or not the one employed is engaged in a distinct occupation or business;

(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

(d) the skill required in the particular occupation;

(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

(f) the length of time for which the person is employed;

(g) the method of payment, whether by the time or by the job;

(h) whether or not the work is a part of the regular business of the employer; and

(i) whether or not the parties believe they are creating the relationship of master and servant.’

With respect to 2(i), it is plain that the parties in the present relationship believed that they were not creating an employment relationship. On the contrary, it must be accepted from the regulatory framework governing their relationship created by Chapter 6 of the IR Act and the determinations made under it, that consistently with the settled position at common law, the parties themselves must be taken to have determined that a relationship of bailment, to the exclusion of any other (including that of employment), should govern the situation. Especially is this so when there can be no suggestion that the bailment relationship is a sham or a device. It is clear that the legislation proceeds on the basis that the relationship between the owner of the licence and the driver is one of bailment. As has been noted, is harmonious with the position that the general law has long recognised in several jurisdictions including the High Court’s decision in Gange.

It is true that, if viewed from one perspective, the statutory licensing system could be seen to proceed upon the assumption that the relevant business is that of the operator, rather than of the driver. But this legislation is directed to an objective, that is, the protection of the public passengers, that is different from the present subject matter, which is the true nature or character of the internal relationship between operator and driver. The licensing requirements do not need to address that question, whereas the industrial legislation does so specifically.

The modern general law concerning whether an employment relationship exists is, as Hill J noted (at 4,780), more flexible than the older authorities suggest. Particular reference should be made to the observations of Mason J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 as follows (at 24):

‘... 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.’

See also per Wilson and Dawson JJ at 35.

We would be prepared to accept that the Commissioner’s contentions might have some force, if they could be viewed apart from: (1) the direction in which the general law has developed, that is, towards bailment and away from employment; and (2) the acceptance of the general law bailment notion in the legislation governing the relationship between licence owner and driver. These considerations apart, there might have been something to be said for a conclusion that the presence here of at least some of the indicia of an employment situation justified the characterisation of the drivers as the providers of labour, and thus within the application of the two Commonwealth statutes now in question. But, in our view, it would be wrong to seek to divorce the issue of the true character of the relationship from its well established general law and statutory setting. When the present circumstances are viewed in that setting or context, a conclusion that the drivers are bailees in a joint adventure is appropriate, notwithstanding the degree of control reserved to the bailor. Such a reservation is not, as was noted in Yellow Cabs, necessarily inconsistent with a bailment relationship.

It may be possible to describe the adoption here of the bailment notion as a legal fiction, operating “to reconcile a specific legal outcome or result with a premise or postulate involving unexpressed considerations of social and economic policy” (per Gummow J, Pyrenees SC v Day (1998) 151 ALR 147 at 190); Fuller, Legal Fictions (1967) at 71); but even if, as Gummow J observed (at 190), the general spirit of the times is “unfavourable to the preservation of legal fictions” under the general law, where, as here, the “equity of the statute” points unequivocally to the characterisation of a relationship as one other than that of employment, the courts should accept that result or outcome (see Nelson v Nelson (1995) 184 CLR 538 per Deane and Gummow JJ at 553-554).

It must follow, in our view, that it should be held that the relevant relationship here was one of bailment, rather than of employment or the provision of labour.”

[37] A number of observations need to be made in relation to the decision of Hill J at first instance and to the decision of the Full Court on appeal in De Luxe Red & Yellows Cabs.

[38] The courts are required to resolve the justiciable issue before them on the basis of the evidence and submissions put to the court. The Courts generally do not have inquisitorial powers such as those given to the Fair Work Commission.

[39] The Federal Court, both at first instance and on appeal, only had material from both the applicant and respondent. Yet the conclusions reached by the Court included conclusions as to the state of mind and intentions of the many hundreds and possibly thousands of taxi drivers, but without any direct evidence from the drivers themselves.

[40] The conclusion by the Full Court was that:

“it is plain that the parties in the present relationship believed that they were not creating an employment relationship. On the contrary, it must be accepted from the regulatory framework governing their relationship created by Chapter 6 of the IR Act and the determinations made under it, that consistently with the settled position at common law, the parties themselves must be taken to have determined that a relationship of bailment, to the exclusion of any other (including that of employment), should govern the situation. Especially is this so when there can be no suggestion that the bailment relationship is a sham or a device.” 11

[41] Whilst the approach of the Federal Court in both of the De Luxe Red and Yellow Cabs cases might have been sufficient for the purposes of deciding a tax case the decisions are not helpful when dealing with a jurisdictional challenge in an unfair dismissal case or in matters which involve compliance with modern awards or the Fair Work Act 2009 (FW Act). In the present matter the actual relationship existing between the Applicant and the Respondent cannot be ascertained through generalizations but must be ascertained through a consideration of all of the circumstances of the case.

[42] Whilst Hill J, at first instance, considered that the decision of Hedigan J in Emjay Motors Pty Limited v Armstrong 12 was “not without difficulty” this characterisation is itself difficult to reconcile with what Hedigan J actually said. Hedigan J was dealing with an appeal from a decision of a Magistrate. An issue on appeal was whether the Magistrate made any finding about the lease agreement being a sham. The facts of the matter were that each of the two companies involved in the matter had a common lease for the drivers to sign. The lease form for one company identified taxi cab M1191 as the vehicle being leased and the lease form for the other company identified taxi cab M1514 as the vehicle being leased. Hedigan J said at page 19 and 20:

“Before me, Ms Lewitan submitted that the magistrate had not held that it was a sham, that the purported leasing agreement was not a sham and indeed that he could not have so found because the parties in fact abided by the terms of the agreement. His Worship did not specifically make any specific finding that the leasing agreement taken as a whole was a sham or that any part of it was. It would seem to me, however, that by his finding that Zacharias “in reality did not lease any particular vehicle” he ·meant that it was a sham or a facade to suggest that Zacharias had actually leased Mll9l. He never drove it and was never offered it. As the evidence indicated, there were at least a hundred drivers. The chances of any driver actually driving Mll9l in accordance with the lease was about 3%. It was fictitious to have a hundred drivers purport to enter into a lease of Mll91. The magistrate in my view was entitled to view it in that way. He used that aspect as a feature of examining the whole of the arrangements between the parties, including but not confined to the evidence concerning the written agreement. Indeed, a false impression of those arrangements would be derived if one looked only at the clauses of the driver agreement.” 13

And at page 43:

“In my view, it cannot be reasonably concluded that the magistrate ignored the agreement, although it appears that he did regard the alleged leasing of vehicle Ml514 as being, if not a sham, at least an artifice.” 14

[43] A careful reading of the decision of Hedigan J provides valuable commentary on matters directly relevant to the matter before me.

[44] In particular the decision of the High Court in Dillon v Gange 15 was relied on in both the decision of Hill J at first instance and in the Full Court decision on appeal in the De Luxe Red & Yellow Cabs cases.

[45] Hedigan J’s comments on Dillon v Gange are relevant and could also be applied to the decisions in De Luxe Red & Yellow Cabs. Hedigan J said:

“...it seems to me that Dillon v Gange is not decisive of the issue in the present case. Clearly, the learned magistrate was of a similar view. The reason for this is that Dillon v Gange was factually “minimalist” because of the way in which the matter came to the High Court. It is binding on me if it applies to the circumstances of this case. In any event there is no need to doubt its correctness, although it has rarely been revisited by the High Court since it was decided. But the limited facts revealed in the High Court report made the decision almost inevitable. Dillon had been struck and injured by a taxi owned by Gange but driven by one Linehan who drove it pursuant to an agreement with terms to which I have referred. The Court concluded that the relationship created by that agreement was one of bailor and bailee and not that of master and servant. It seems likely that it was put in this way by the High Court because of the way in which the matter came to the High Court; that is, that the dichotomy was simply bailor - bailee or master and servant.

The claim made by Dillon in Dillon v Gange was that the relevant agreement had been made subsequent to the happening of the accident, not before it. Gange and three other witnesses were called to establish the contrary, namely that it was entered into prior to the happening of the accident. No relevant evidence is disclosed in the report as having been given in the case (which was tried by a jury) to add any additional dimension to the agreement between owner and driver other than t .he actual written agreement. The jury had rejected the defendant’s evidence as the date entering into the agreement. The High Court determined, in effect, that it was not open not open to a jury in the circumstances to reject that evidence, that the date in the agreement prima facie was the date of its execution and had not been rebutted by the evidence. The report makes it clear (see Rich, A.C.J. 257) that no evidence was tendered to suggest that there was in existence any agreement other than what was embodied within the four corners of the written agreement which the evidence established had been acted upon. The submission made on behalf of Dillon that the agreement was a sham in those circumstances had little prospect of success as there was no evidence in support of the proposition. One might perhaps be forgiven for treating Ms Lewitan’s persistent submission that the parties in this case were free to, and did with full intention, enter into a relationship of lessor and lessee with reservation when the evidence indicates that Zacharias came in to Emjay looking for a job as a driver.” 16

[46] It is also very clear that the decisions in the De Luxe Red & Yellow Cabs cases were factually minimalist given that there was no evidence from any one of the thousands of drivers driving for the taxi operators in that matter. The findings of the courts in the De Luxe Red & Yellow Cabs cases that the drivers were not employees is not determinative of the question: Can a taxi driver be an employee?

[47] The very development of the case law on taxi drivers which was considered in the De Luxe Red & Yellow Cabs cases recognised the rebuttable presumption that existed in some jurisdictions that taxi drivers should be employees. The mere fact that there was such a rebuttable presumption supports a conclusion that taxi drivers may be employees.

Changed Industrial Relations Environment since De Luxe Red & Yellow Cabs Cases

[48] It is important to distinguish the De Luxe Red and Yellow Cabs cases from the present industrial relations environment. Hill J in the first De Luxe Red and Yellow Cabs case said:

“There is no industrial legislation operating in Victoria regulating taxis” and as at 1998 this was true. However that is no longer the case, nor has it been the case since March 2006.”

[49] The Passenger Vehicle Transportation Award 2010 17 is a modern award which covers the following industry:

4. Coverage

4.1 This industry award covers employers throughout Australia in the passenger vehicle transportation industry and their employees in the classifications listed in clause 14—Minimum wages to the exclusion of any other modern award.

4.2 Passenger vehicle transportation industry means the transport of passengers by:

(a) motor vehicle, limousine or hire car;

(b) bus or coach; and

[50] That the passenger vehicle transport industry includes employee taxi drivers was recognised by the Full Bench of the Australian Industrial Relations Commission when it made this award:

“[227] The terms of this modern award are largely the same as the exposure draft. Some changes have been made which we refer to later. Before doing so however we should refer to submissions concerning taxi drivers and whether the award should contain a specific classification for them. This matter was referred to by us in our statement of 22 May 2009. We there noted the submissions made by the New South Wales Taxi Council Limited and Victorian Taxi Association that no taxi driver in Australia was an employee nor in an employment relationship with the owner or operator of the taxi vehicle which was driven. Again in the post exposure draft submissions the contest between these industry representatives and those representing taxi drivers continued. Submissions were made by the Australian Taxi Drivers Association, Taxi Drivers Association of Victoria, NSW Taxi Drivers Association and a Mr Ahmed. They sought the inclusion of a specific reference to a taxi in the definition of motor vehicle and to a taxi driver in the classifications schedule.

[228] Although we acknowledge the conviction with which these submissions were made we have not been persuaded to accommodate the amendments sought. This modern award will only apply to an employee as defined under the Fair Work Act. Merely by identifying the classification of a taxi driver in the modern award will not of itself impact on the contractual arrangements between that taxi driver and the owner or operator of the taxi driven by them. If we were to include a specific reference to a taxi driver that may give rise to an expectation that we had, in the context of award modernisation, considered and ruled upon the status of the relationship between these persons. All we can properly do is to repeat what we said in our earlier statement that if a taxi driver is an employee then, assuming the employer is in the industry as defined in this modern award, that employee would come within the Grade 2 classification which includes “a driver of a motor vehicle, limousine or hire car”. 18

[51] Prior to the making of the Passenger Vehicle Transportation Award 2010 employee taxi drivers in both NSW and Victoria were not protected by an award in either State jurisdiction or in the Federal jurisdiction. (However there had been award coverage in NSW for employee taxi drivers from 1926 to the early 1980’s and since the late 1800’s and up to the early 1990’s the legislative regime in Victoria included a presumption in favour of taxi drivers being employees.)

[52] There can be no doubt that employee taxi drivers have the protection of both the National Employment Standards and the Passenger Vehicle Transportation Award 2010 and have had this protection since 1 January 2010.

[53] Prior to the making of the Passenger Vehicle Transportation Award 2010 taxi driver employees had, since March 2006, the protections and entitlements of the Australian Fair Pay and Conditions Standard (AFPCS) which were introduced through the Work Choices legislation. At the very least an employee taxi driver in Victoria had to be paid at least the Federal Minimum Wage and receive the paid leave entitlements as provided by the AFPCS.

The industrial relations landscape in NSW at the time of De Luxe Red & Yellow Cases

[54] Hill J in the first De Luxe Red and Yellow Cabs case said, relevantly:

“CONCLUSION AS TO THE CHARACTER OF THE AGREEMENTS

[55] The Full Court said:

“Before the primary Judge, the case was conducted on the basis that the Taxi Industry (Contract Drivers) Determination 1984 (the “1984 Determination”), made pursuant to the Industrial Arbitration Act 1940 (NSW) required that there be a bailment relationship between the owner of the taxi licence and the driver. The terms and conditions governing the bailment relationship were set out in a Schedule to the 1984 Determination, which was made by consent under the 1940 Act. (emphasis added)”

[56] The Full Court also cited the following decision:

“In Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties [1975] 1 NSWLR 346, Sheppard J said (at 347-348):

“... in most cases drivers of taxicabs owned by other persons are not employees of such owners, but are bailees of the cabs which they drive. I refer, inter alia, to Smith v General Motor Cab Co Ltd [1911] AC 188 at p 192 and Dillon v Gange (1941) 64 CLR 253.

... the relationship of master and servant does not exist between the owner of a taxicab and a driver thereof...”“

[57] The two underlined propositions are simply wrong and the selective quote from Sheppard J does not accurately reflect the decision of Sheppard J!

[58] Neither the Industrial Arbitration Act 1940 (NSW) nor its replacement the Industrial Relations Act 1996 (NSW) have ever “expressly negated” the operation of an employer/employee relationship between a taxi driver and a taxi operator, and, neither the Industrial Arbitration Act 1940 (NSW) nor its replacement the Industrial Relations Act 1996 (NSW) have ever “required that there be a bailment relationship between the owner of the taxi licence and the driver”.

[59] The most that can be said of both the Industrial Arbitration Act 1940 (NSW) and its replacement the Industrial Relations Act 1996 (NSW) is that:

(i) if the relationship was that of employee and employer then both parties to the relationship had access to the NSW Industrial Commission (later the NSW Industrial Relations Commission) in relation to disputes including seeking the making of an award, and;

(ii) if the relationship was that of bailor and bailee in relation to a taxi cab then the Commission had the power to make a determination to set certain minimum standards which applied to the bailee taxi driver.

[60] The statement by Sheppard J that “the relationship of master and servant does not exist between the owner of a taxicab and a driver thereof” was made in the context of considering a stamp duty case in which both parties drew the courts attention to the Taxi Drivers (State) Award, an award of the Taxi Drivers (State) Conciliation Committee in 1972, which contained provisions relating to a bailment agreement. Specifically clause 1 of the Taxi Drivers (State) Award provided as follows:

“1. The Bailment Agreement

(a) No person shall drive a taxi cab as a bailee thereof unless he shall have previously executed an agreement in or to the effect of the agreement contained in the Schedule to this award or an agreement no less favourable to him than the agreement contained in the said Schedule to this award.

(b) No registered owner of a taxi cab shall bail it to a person with a view to such person driving it as a bailee driver until he and such bailee shall have executed an agreement in the form set out in the Schedule to this award or an agreement containing terms more favourable to the bailee than the terms of the agreement as set out in the said Schedule.”

[61] The Taxi Drivers (State) Award had very limited coverage as it only applied to bailee drivers in the Sydney, Newcastle or Wollongong areas who worked more than 2 shifts per week for an individual bailor.

[62] It was in considering clause 1 of the Taxi Drivers (State) Award that Sheppard J said:

“Although the relationship of master and servant does not exist between the owner of a taxicab and a driver thereof, the Conciliation Committee had power, so it was conceded by both parties, to make the award in question by reason of the provisions of s.88E(1)(a) of the Industrial Arbitration Act, 1940. The benefit which an agreement in terms of that in the schedule to the award confers upon drivers is that it provides for them (in clauses which I have not set out), although they are not employees, annual holidays, sick leave and long service leave, or payments in lieu thereof.”

[63] Importantly it must be understood that since 1926 (and at least until 1982 given the limited research I have undertaken) there was an award of the Hire Car and Taxi Drivers (State) Conciliation Committee known as the Hire Car and Taxi Drivers (State) Award which set the wages and conditions of employment for employee taxi drivers. This award operated in all parts of NSW except for the County of Yancowinna.

[64] Certainly in 1975 when Sheppard J issued his decision in Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties 19 there were two awards which could apply to a taxi driver in NSW. If the taxi driver was an employee anywhere in NSW, except Broken Hill, they were covered by the Hire Car and Taxi Drivers (State) Award. If the taxi driver was a bailee in the Sydney, Newcastle or Wollongong areas and the bailee taxi driver worked more than 2 shifts per week for an individual bailor then the bailee driver was covered by the Taxi Drivers (State) Award. It cannot be suggested that Shephard J was unaware of the Hire Car and Taxi Drivers (State) Award as variations to that award had been made by a Full Bench comprising Shephard J.20

The previous legislative landscape for taxi drivers in Victoria

[65] In Victoria the early Carriages Acts from 1864 onwards granted the right to the Melbourne and Geelong Municipalities to make by laws for regulating hackney carriages. The Melbourne City Council exercised this right to enact a by-law which required hackney cabs to be driven by the owner or an employee of the owner except where otherwise permitted by the Council. Later Transport Acts removed the role of regulating taxis from the Councils of Melbourne and Geelong but retained the general requirement that a taxi be driven by the owner or an employee of the owner but with the power to grant an exemption from this requirement. The Transport Act 1983 relevantly contained the following provision:

“S.144. (1) The following shall be implied conditions of every commercial passenger vehicle licence-

(b) that in relation to the vehicle, the provisions of any Act or regulation thereunder with respect to-

(i) the manner in which the persons by whom the vehicle may be driven and the appropriate industrial awards applicable to such persons;

(ii) the number of passengers that may be carried in the vehicle;

(iii) the construction equipment and condition of the vehicle;

(iv) limitation of hours of driving-

are complied with; and

(c) that the vehicle is not, without the consent in writing of the Roads Corporation, operated by any person other than the owner or a person employed by the owner” (emphasis added)

[66] Not only did the Transport Act 1983 create a presumption that taxis would only be driven by the owner or an employee of the owner but additionally the employee would be covered by the appropriate industrial awards. That these implied conditions were not always complied with by owners is made clear through a number of cases. These cases identified the nature of the presumption that a taxi driver should be an employee but then made clear that the presumption was rebuttable and that the evidence needed to be considered to establish what was the real nature of the relationship. Where taxi owners deliberately flouted the law requiring that the driver be an employee and established a bailor/bailee relationship then the courts had regard to the real relationship established.

[67] In all respects the approach of the courts has been remarkably consistent. It is the real nature of the relationship that is important and which has to be identified not the label attached to the relationship or the mere form in which the relationship is presented.

[68] The real issue at all times was and is determining the true nature of the relationship between a taxi driver and a taxi operator.

[69] In McDougal v Castlemaine Taxis Pty Ltd 21 Lewin C of the Australian Industrial Relations Commissions concluded that two taxi drivers in the Victoria rural town of Castlemaine were employees and not independent contractors. The conclusion however was in the context of “the somewhat unique and highly specific facts of” the matter.

[70] What is clear from all of the foregoing is that a taxi driver may be an employee.

Are the relationships of Bailor/Bailee and Employer/Employee Mutually Exclusive?

[71] The opening words of Palmer on Bailment, 3rd edition, 2009 (Palmer) are:

“Bailment is one of the commonest transactions in everyday life. Its breadth and diversity are enormous. And yet it is unknown to non-lawyers, and often neglected by lawyers themselves. The result is that a fertile source of legal development has been largely unexplored.”

“The essence of bailment is possession.” “...(A) bailment comes into being whenever one person is knowingly and willingly in possession of goods that belong to another.” 22

[72] Palmer considers the nature of bailment and what it means. Palmer acknowledges that the 1703 decision of Holt CJ in Coggs v Bernard was “the seminal modern decision on this subject” but the analysis of Lord Holt CJ “is now significantly outmoded” because “the modern foundation of bailment has been clearly and authoritatively confirmed by a series of appellate decisions over the past decade and a half. Foremost among the authorities is the speech of Lord Goff of Chievely in The Pioneer Container, [1994] 2 A.C 324 PC.” 23

[73] Palmer states a General Rule concerning the relationship between employment and bailment:

“It has been stated on numerous occasions that a servant who, as a comcomitant of his employment, acquires custody of his master’s goods does not in the ordinary circumstances become a bailee.

Possession is deemed to remain in the master in such circumstances and the servant, having a mere custody or temporary control, neither enjoys the possessory remedies nor (would it seem) owes the strict duties of a bailee.”

[74] Palmer also comments that:

“The continued existence of the rule is further indorsed by the numerous modern decisions which treat the relationships of master and servant and bailor and bailee as mutually exclusive.” 24

[75] The specific issue of taxi drivers is dealt with by Palmer in the context of a discussion around bailment and contracts of service.

“3-083 According to traditional theory, a servant has mere custody of his master’s property and does not become a bailee. In Chapter 7 we challenge this assumption and argue that a person may become the bailee of a chattel while simultaneously occupying the position of servant or agent towards the bailor. The reason for this apparent ambiguity is that the relationships are imposed for different purposes and identified by different tests. Thus they may coexist without conf1ict within a single situation.

While, however, the foregoing analysis may produce acceptable results in the context of a master’s action against his servant for loss of or damage to the master’s goods; the fact remains that, for most other purposes, bailees cannot be regarded as the employees of their bailors. This may be inferred by examining the purposes for which the courts may wish to discover a relationship of master and servant and the criteria by which that relationship may be established. The existence of the relationship may fall in question for a number of reasons: to establish the servant’s rights under the alleged contract of service, to answer questions of tax liability or insurance benefit, or impose vicarious liability upon the alleged employer. The identification of the relationship occurs by the use of certain compound criteria: the degree of control asserted by the “employer” over his employee’s performance of the task for which he is engaged, the extent to which the employee is assimilated into the employer’s general organisation and workforce, the method of payment, the regularity and proposed duration of the employment and the powers of termination or dismissal. Clearly the use of these criteria will dictate in the great majority of cases that an ordinary bailee of goods such as a hirer, a repairer, a warehouseman or carrier is not to be simultaneously identified as the servant or agent of the bailor.” 25

[76] Palmer goes on to say:

“For this reason the relationships of bailor and bailee and master and servant can be regarded, for most practical purposes, as mutually exclusive: many servants are so closely supervised that they cannot acquire possession of their masters’ chattels, while most bailees are so loosely controlled that they cannot be deemed to be servants. Nevertheless, the two questions should be answered separately”.

And:

“Generally, it is impossible to regard the hirer of a chattel as in any sense the servant or agent of the owner: if anything, the relevant service is provided by the owner. The position becomes less clear-cut, however, when the hirer employs the chattel for the purposes of commercial reward and pays part of that reward, in substitution for a hiring charge, to the owner. In such a case the hirer may be thought to be working for the benefit of the owner, and there may be sufficient common interest in the enterprise to justify regarding the hirer as a servant or agent of the owner. The problem is exemplified by a long sequence of English decisions involving the bailment of taxicab between owners and drivers. Instead of paying the driver fixed wages, the owner may keep a proportion of the takings or may allow the driver to keep all the takings in return for a guaranteed daily sum. The owner will normally tax, maintain and insure the cab but will not have any immediate control over the way the driver conducts his business. Undoubtedly the driver may be regarded as a bailee for the purpose of rendering him liable for any damage inflicted on the cab, but the owner may not necessarily escape being vicariously liable for torts committed while the driver is going about his business. Such liability depends upon whether the driver is his servant or agent under the various judicial and statutory tests which have been laid clown as determining that relationship. These tests are not precisely synonymous with those that seek to establish whether the driver is a bailee.” 26

[77] At 3-084 Palmer further comments on the Australian approach:

“Australian courts ......have preferred to regard the relationship of master and servant not as a matter of legislative fiction but as a question of fact. In answering this question, they have looked primarily to the control which the owner has asserted over the driver and the degree of independence with which the latter is entitled to act. The normal conclusion is that the driver is a bailee of the cab and that the owner is not vicariously liable for his negligence: but a contrary result was reached in Fenn v Sagar where Wolff J. discovered a relationship of master and servant...”

And:

“In answering questions of vicarious liability, Australian judges have occasionally relied upon English cases in which some other issue required analysis of the relationship between owner and driver. In such cases, the driver has almost unanimously been to be a bailee.”

[78] The analysis provided by Palmer is sufficiently clear to permit the following propositions to be stated:

● The relationships of employer and employee and bailor and bailee are not mutually exclusive.
● However, the relationships of bailor and bailee and employer and employee can be regarded, for most practical purposes, as being mutually exclusive.
● The relationships of bailor and bailee and employer and employee are imposed for different purposes and identified by different tests.

[79] It would appear that the observation of the Full Court in De Luxe Red & Yellow Cabs that:

“It may be possible to describe the adoption here of the bailment notion as a legal fiction, operating “to reconcile a specific legal outcome or result with a premise or postulate involving unexpressed considerations of social and economic policy” (per Gummow J, Pyrenees SC v Day (1998) 151 ALR 147 at 190); Fuller, Legal Fictions (1967) at 71); but even if, as Gummow J observed (at 190), the general spirit of the times is “unfavourable to the preservation of legal fictions” under the general law, where, as here, the “equity of the statute” points unequivocally to the characterisation of a relationship as one other than that of employment, the courts should accept that result or outcome (see Nelson v Nelson (1995) 184 CLR 538 per Deane and Gummow JJ at 553-554).” 27

is unwarranted. There was never any doubt that the NSW legislation permitted the making of determinations which set minimum conditions for the engagement of drivers who were bailees of a taxi cab and not employees. There was no need to suggest that the notion of a bailment agreement in NSW for taxi drivers was a legal fiction. The real issue is and has been whether the driver is an employee or is a bailee. If the driver is a bailee then there is no legal fiction concerning the existence of a bailment agreement and if the driver is an employee then there is no bailment. The observations of the Full Court referred to above appear to be otiose when considered in light of the proposition derived from Palmer that the relationships of bailor and bailee and employer and employee are imposed for different purposes and identified by different tests.

The Relationship between the Applicant and the Respondent

[80] The Respondent relies upon the decision of McDougal J in Forstaff v The Chief Commissioner of State Revenue, where his Honour said:

“77 I therefore conclude that, in the situation with which I am concerned, the relationship between the concepts of “employee” and “independent contractor” may not be dichotomous. The workers are either employees (of whom, is a question to be considered) or they are not. If they are not, they may be, but are not necessarily, independent contractors (to whom, is again a question to be considered).

78 Accordingly, I think that the correct approach in principle is to analyse the matter as Mr Gleeson submitted I should, namely by asking whether the workers were employees of Forstaff. Further, and contrary to the submission of Mr Kimber (or its necessary consequence), I do not think that a negative answer must necessarily be given to that question if it were shown that workers were independent contractors to Forstaff.” 28

[81] This approach is not inconsistent with the approach adopted by previous Full Benches of this Commission and its predecessors.

[82] The question properly before the Commission in the present matter is defined by the relevant provisions of the Fair Work Act 2009. An applicant for an unfair dismissal remedy must be a national system employee as at the time of the dismissal. So much is clear from the language of s.382 and 322 of the Act. Thus the question properly before the Commission in the present matter is: Is the applicant a national system employee?

[83] The Full Bench of FWA in Jiang Shen Cai trading as French Accent v Do Rozario 29 (French Accent), recast the summary of the law in Abdalla v Viewdaze P/L30 (Abdalla), as follows:

“The general law approach to distinguishing between employees and independent contractors may be summarised as follows:

(1) In determining whether a worker is an employee or an independent contractor the ultimate question is whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part? This question is concerned with the objective character of the relationship. It is answered by considering the terms of the contract and the totality of the relationship.

(2) The nature of the work performed and the manner in which it is performed must always be considered. This will always be relevant to the identification of relevant indicia and the relative weight to be assigned to various indicia and may often be relevant to the construction of ambiguous terms in the contract.

(3) The terms and terminology of the contract are always important. However, the parties cannot alter the true nature of their relationship by putting a different label on it. In particular, an express term that the worker is an independent contractor cannot take effect according to its terms if it contradicts the effect of the terms of the contract as a whole: the parties cannot deem the relationship between themselves to be something it is not. Similarly, subsequent conduct of the parties may demonstrate that relationship has a character contrary to the terms of the contract.

(4) Consideration should then be given to the various indicia identified in Stevens v Brodribb Sawmilling Co Pty Ltd and the other authorities as are relevant in the particular context. For ease of reference the following is a list of indicia identified in the authorities:

● Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

Control of this sort is indicative of a relationship of employment. The absence of such control or the right to exercise control is indicative of an independent contract. While control of this sort is a significant factor it is not by itself determinative. In particular, the absence of control over the way in which work is performed is not a strong indicator that a worker is an independent contractor where the work involves a high degree of skill and expertise. On the other hand, where there is a high level of control over the way in which work is performed and the worker is presented to the world at large as a representative of the business then this weighs significantly in favour of the worker being an employee.

“The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in the performance of his work resided in the employer so that he was subject to the latter’s order and directions.” “[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.”

● Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

The right to the exclusive services of the person engaged is characteristic of the employment relationship. On the other hand, working for others (or the genuine and practical entitlement to do so) suggests an independent contract.

● Whether the worker has a separate place of work and or advertises his or her services to the world at large.

● Whether the worker provides and maintains significant tools or equipment.

Where the worker’s investment in capital equipment is substantial and a substantial degree of skill or training is required to use or operate that equipment the worker will be an independent contractor in the absence of overwhelming indications to the contrary.

● Whether the work can be delegated or subcontracted.

If the worker is contractually entitled to delegate the work to others (without reference to the putative employer) then this is a strong indicator that the worker is an independent contractor. This is because a contract of service (as distinct from a contract for services) is personal in nature: it is a contract for the supply of the services of the worker personally.

● Whether the putative employer has the right to suspend or dismiss the person engaged.

● Whether the putative employer presents the worker to the world at large as an emanation of the business.

Typically, this will arise because the worker is required to wear the livery of the putative employer.

● Whether income tax is deducted from remuneration paid to the worker.

● Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

Employees tend to be paid a periodic wage or salary. Independent contractors tend to be paid by reference to completion of tasks. Obviously, in the modern economy this distinction has reduced relevance.

● Whether the worker is provided with paid holidays or sick leave.

● Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

Such persons tend to be engaged as independent contractors rather than as employees.

● Whether the worker creates goodwill or saleable assets in the course of his or her work.

● Whether the worker spends a significant portion of his remuneration on business expenses.

It should be borne in mind that no list of indicia is to be regarded as comprehensive or exhaustive and the weight to be given to particular indicia will vary according to the circumstances. Features of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question.

(5) Where a consideration of the indicia (in the context of the nature of the work performed and the terms of the contract) points one way or overwhelmingly one way so as to yield a clear result, the determination should be in accordance with that result. However, a consideration of the indicia is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated in (1) above. If, having approached the matter in that way, the relationship remains ambiguous, such that the ultimate question cannot be answered with satisfaction one way or the other, then the parties can remove that ambiguity a term that declares the relationship to have one character or the other.

(6) If the result is still uncertain then the determination should be guided by “matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability” including the “notions” referred to in paragraphs [41] and [42] of Hollis v Vabu.” [footnotes omitted]

[84] Neither the introductory words of the summary, nor the way in which the ultimate question is phrased require that two competing questions be answered. The summary does however make it easier to answer the single question required to be answered by s.382 and 322 of the Act.

[85] It is important to approach the application of the summary of the law in French Accent by remembering that the Commission is not making a discretionary decision when deciding if an applicant is or is not an employee. A full Court of the Federal Court in Sammartino v Commissioner Foggo considered an appeal against a decision of a Full Bench of the then Australian Industrial Relations Commission (AIRC) which in turn had considered an appeal against a decision of Commissioner Foggo. The issue was whether Mr Sammartino was an employee and thus within the unfair dismissal jurisdiction exercised by the AIRC under the Workplace Relations Act or whether he was an independent contractor and thus outside that jurisdiction. The Full Court said:

“The question whether a person is an employee for the purposes of Division 3 of the Act is not in any way a discretionary decision. The decision maker must first ascertain what is meant by the word "employee" when used in Division 3. Then the decision maker must make findings of fact and determine whether the facts as found establish whether the person is an employee or not. No exercise of discretion is involved.” 31

[86] The most useful way of considering the nature of the relationship between the Applicant and the Respondent is to start by using the criteria identified in paragraph 4 of the above summary of the general law.

Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place or work, hours of work and the like.

[87] The evidence of the Respondent was that he exercised no effective control over the Applicant in the performance of his driving the taxi. The Respondent’s evidence was:

“3. It was agreed between us that Mr. Dick would have the use of a taxi and could keep the taxi at his place of residence provided that if other taxi drivers wanted to hire the taxi, the taxi would be made available to those taxi drivers upon notice. This situation occurred on a regular basis. The other taxi drivers would then return the taxi back to Mr. Dick at the end of their operation hours.

4. It was also agreed that Mr. Dick would simply hire the taxi and could use it as he saw fit provided that he did not damage the taxi, made sure that it had reasonable amount of petrol and was kept clean, and that all monies received by him would be subject to the operation of the metre in the taxi. Otherwise, he could use the taxi wherever he wanted to operate, and he could use it for such hours as he saw fit. I had no involvement in how or where he operated the taxi. I would, however, pick up the taxi on a Sunday to service it.” 32

[88] The evidence of the Applicant is generally supportive of the Respondent’s evidence as to lack of exercise of control by the Respondent over the Applicant’s driving of the taxi. However, the evidence of the Applicant does identify at least one particular area where the Respondent exercised control over the Applicant and that was in relation to the Respondent contacting the Applicant to pick up the Respondent’s customers. 33

[89] The very nature of the taxi industry suggests that there is little possibility of an employer exercising any real control over the manner in which a taxi driver employee carries out his work. In which case the question posed by this criterion does not help in determining the actual relationship existing between the Applicant and the Respondent. From common knowledge it would appear that users of taxi cabs find or acquire the services of a taxi driver through four obvious means. Firstly, through the customer contacting a taxi cab network who will in turn find an available taxi to pick up the customer. Secondly, through customers going to a designated taxi rank and taking a taxi in the queue. Thirdly, customers hailing a passing taxi on a street. Fourthly, customers directly calling specific taxi drivers or operators to have that specific taxi driver or operator provide the taxi service.

[90] Even where a taxi driver is an employee of a taxi operator there appears to be few means by which the employer could exercise control over the manner in which the driver performs his or her work whilst driving the taxi. The present matter identifies what may be one of the few ways in which a putative employer could exercise control over a taxi driver and that is by contacting the driver to pick up a passenger who has contacted the operator rather than the driver.

[91] The absence of the exercise by the Respondent of control over the manner in which the Applicant performed his work is in the circumstances of the present matter is not a strong indicator that the Applicant is not an employee.

[92] In the present matter there are other aspects of control that are present. The Respondent controls which vehicle will be given to the Applicant to drive. 34 The Respondent controls the reporting requirements placed upon the Applicant.35 It also appears that the Respondent controls the handling of non cash payments by customers as all non cash payments go through the Respondents bank account.36 Whilst these levels of control are supportive of the Applicant’s contention that he is an employee they are, on their own, by no means determinative of the issue.

Whether the worker performs work for others (or has a genuine and practical entitlement to do so).

[93] The evidence of both the Applicant and the Respondent was that the Applicant has been driving day shift for the Respondent for 16 years. The evidence submitted in this matter gives a detailed explanation of the days and hours worked in 2012 by the Applicant and shows a regular pattern of work where the Applicant would have little or no opportunity to work for anyone other than the Respondent given the few days the Applicant was not driving for the Respondent.

[94] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the worker has a separate place of work and or advertises his or her services to the world at large.

[95] The place of work is a taxi owned and operated by the Respondent and in the sense posed by this criterion the Applicant does not have a place of work separate from the place of work of the putative employer.

[96] The evidence of the Applicant was that he had his own customers and that he had a mobile phone number that he could be contacted on by persons who wished to have the Applicant drive them. 37 The Applicant in his written submissions conceded that he had a business card.38

[97] The evidence and concession from the Applicant does not directly address the issue raised by this criterion.

[98] The notion of the Applicant having his own “customers” in his own business is simply not supported by the facts. I accept that the Applicant had persons who preferred to use the Applicant’s driving services rather than other taxi drivers and that such persons could contact the Applicant directly through his mobile number. I also accept that the Applicant has referred to such persons as his “customers”.

[99] However, the evidence as to fare sharing does not support a conclusion that these persons were the Applicant’s “customers”. The evidence is that the Applicant was only entitled to keep 48% of the fare paid by the Applicant’s “customers” and 52% of the fare of the Applicant’s “customers” was retained by the Respondent. In this sense the customers are more the customers of the Respondent than of the Applicant.

[100] I also note that the concept of ownership of a customer is somewhat illusory. The uncontested evidence of the Applicant was that the Respondent would ring the Applicant to “pick up” the Respondent’s customers. In this sense the Respondent’s customers are also customers of the Applicant. As noted above, it did not matter whose customer was being driven by the Applicant, the Respondent kept 52% of the fare and the Applicant kept 48% of the fare.

[101] There is no evidence or even an assertion that the Applicant had any exclusive arrangement with his “customers” to provide them with taxi services. Nor is there any evidence that these “customers” would only use the Applicant to the exclusion of other taxi services to provide a taxi service.

[102] I note the concession made by the Applicant that he has a business card which provides the contact details of the Applicant. There was no evidence before the Commission concerning the distribution of this business card nor even the details of the business card. Having regard to the common purpose of business cards it is reasonable to conclude that the purpose of the Applicant having a business card was to advertise his occupation as a taxi driver and to solicit either new or repeat business from existing or prospective customers. But, as noted above, any custom acquired through the distribution of the Applicant’s business card gave a greater benefit to the Respondent than to the Applicant through the 52/48 fare split.

[103] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the worker provides and maintains significant tools or equipment.

[104] What is agreed by the parties in this matter is that the Applicant only provided his labour and the Respondent supplied and maintained the vehicle.

[105] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the work can be delegated or subcontracted.

[106] The evidence of both the Applicant and the Respondent makes clear that each time the Applicant took custody of the Respondent’s taxi it was on the basis that the Applicant drove the taxi. The arrangement in place between the Applicant and the Respondent appears to have precluded the possibility that the Applicant could have delegated the driving of the taxi to another person or could have subcontracted the use of the taxi to another person.

The arrangement in place between the Applicant and the Respondent was clearly predicated upon the Applicant personally providing the service of driving the Respondent’s taxi whilst the taxi was in the temporary custody of the Applicant.

[107] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the putative employer has the right to suspend or dismiss the person engaged.

[108] The evidence of the Respondent makes very clear that the Respondent had the right to dismiss the Applicant from his work as a taxi driver of the Respondent’s taxi. The relationship between the Applicant and the Respondent ended at the initiative of the Respondent and was described by the Respondent as follows:

“On or about the 5th December 2012, I told the Applicant that he had breached the agreement and I was no longer prepared to hire the cab to him as he had breached the trust I had placed in him and despite making promises he had failed to make outstanding hire payments. He then returned the taxi keys.” 39

[109] Whilst the Respondent describes the termination of the relationship in terms of hire of the cab the practical effect of the relationship existing between the Applicant and the Respondent was that the Respondent could on any day simply refuse to provide a taxi for the Applicant to drive and equally the Applicant could simply refuse to drive a taxi on any day. Importantly, where the Applicant did not intend to drive the taxi on any day the Applicant appeared to be under some requirement to advise the Respondent of this so that the Respondent could give to the taxi to another driver.

[110] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the putative employer presents the worker to the world at large as an emanation of the business.

[111] In the present matter this criterion is not relevant. This is so because of the operation of the laws of the State of Victoria. An employer cannot present a taxi driver employee to the world at large as an emanation of the business of the employer through requiring the taxi driver employee to wear the livery of the employer.

[112] Regulation 31 of the Transport (Taxi-Cabs) Regulations 2005 provides as follows:

“31. Driver’s appearance

(1) While operating a taxi-cab, the driver of the taxi-cab must wear-

(a) if a uniform design has been approved under regulation 32 for the person accredited to provide taxi-cab network services with whom the operator of the taxi-cab has approved arrangements, a uniform which conforms to that design; or

(b) if paragraph (a) does not apply, a uniform approved by the licensing authority.

Penalty: 5 penalty units.

(2) While operating a taxi-cab, the driver of the taxi-cab must ensure that his or her appearance is neat and clean.

Penalty: 5 penalty units.”

[113] As Reg 31(1)(a) makes clear, every driver of a taxi must wear a uniform which relates to the taxi-cab network service rather than to the taxi operator. The practical outcome of this is that in the present matter where the Respondent had an arrangement with a taxi-cab network service, as he was required to by S.133(4) of the Transport (Compliance and Miscellaneous) Act 1983, then any driver of the taxi, including the Respondent, was required to wear a uniform which identified the taxi-cab network service.

[114] Furthermore it was the responsibility of the driver to provide the required uniform, even if the driver was an employee of a taxi operator. Thus where a taxi driver was an employee of a taxi operator the taxi operator, as the employer, would not have had any obligation under clause 15.2(b) of the Passenger Vehicle Transportation Award 2010 to provide the uniform or reimburse the employee for the cost of the uniform as the requirement to wear a uniform was not a requirement of the employer but was a requirement arising under a State law.

[115] In the present matter this criterion is neutral as it neither supports nor detracts from the position adopted by either the Applicant or the Respondent.

Whether income tax is deducted from remuneration paid to the worker.

[116] The evidence of both the Applicant and the Respondent is that the Respondent never, in the 16 years of the relationship, deducted any income tax from the monies earnt by the Applicant. The Respondent paid gross amounts to the Applicant.

[117] The evidence of the Applicant is that when ABN’s were introduced in 1998 and the Respondent required the Applicant to provide the Respondent with an ABN that the Applicant obtained an ABN and gave it to the Respondent. The Applicant’s evidence was that he treats his tax obligations as arising out of having an ABN.

[118] The Respondent drew the Commissions attention to a publication of the Australian Tax Office 40 which was downloaded from the ATO website and which emphasises the need for taxi drivers who are not employees to pay GST. Exhibit R2 is titled, “Taxi industry - issues register” and contains the following:

“Registration for ABN, GST and fuel tax credits

Updated

Issue

ATO decision

22/03/00

Do taxi drivers have to register for GST?
Non-interpretative - straight application of the law.

Yes. If you drive a taxi, then you must register for goods and services tax (GST). It does not matter how often you drive a taxi.
If the driver is an employee, then the driver must not register for GST. The driver is an employee when the driver is not entitled to keep any of the takings and is paid a set amount to drive the taxi. In these limited circumstances, the employer is considered to be the person providing taxi travel and must register for GST.

01/07/08

Why do drivers have to register for the GST irrespective of turnover?
Non-interpretative - straight application of the law.

For other businesses, the GST registration turnover threshold is $75,000. For taxi drivers, including chauffeur driven limousines and hire cars, there is no registration turnover threshold. This means that anyone who drives a taxi, chauffeur driven limousine or hire car, must register for GST, unless they are an employee for pay as you go withholding (PAYG withholding) purposes. The government chose to apply compulsory registration of taxi drivers for several reasons including:

● to avoid the confusion that would be created if some taxis had to charge GST and others did not

● avoiding the added problem that would arise if a passenger was using a taxi for a business trip (creditable acquisition). In this instance, the passenger would want to be able to claim an input tax credit for the GST included in the fare
● meter rates are set by each state authority and after 1 July 2000 all meters were adjusted to reflect the GST. If some drivers were registered and others were not, all would be collecting the higher rate. This would disadvantage drivers who had to be registered if the ordinary registration turnover threshold applied.

01/07/08

Do owners have to register?
Non-interpretative - straight application of the law.

Owners who also drive some shifts are also required to register for GST regardless of their turnover. Owners who do not drive shifts and just lease out the license and cab are not supplying taxi travel and have the choice of whether or not to register if their turnover is under $75,000. Like all other businesses, owners must register if their turnover exceeds $75,000.

27/10/03

What forms have to be completed?
Non-interpretative - straight application of the law.

Taxi drivers have to complete an Australian business number (ABN)/GST registration form. New drivers who commence after 1 July 2000 must register within 21 days of commencing a business as a taxi driver.
You also have to complete an activity statement for each quarterly or monthly tax period. A tax period is every three months for most drivers, but is every month for businesses with a turnover in excess of $20 million. Drivers that are eligible for quarterly tax periods can also elect to use monthly tax periods. The activity statement asks for information required to determine your PAYG and GST obligations.

27/10/03

When is a driver an employee or under a bailment arrangement?

Most drivers are under a bailment arrangement. This means that you make a payment of some kind that allows you to use the taxi to drive. The payment could be in the form of lease payments or an amount that is paid in at the end of each shift. It does not matter whether the amount is a set amount or a percentage of the shift takings.
In unusual cases, a person may be an employee in the taxi industry. An employee works for the owner or leaseholder of a cab and is paid an hourly rate or weekly wage that is independent of the cab’s actual takings. Employees are subject to PAYG withholding on their earnings. That is, amounts of tax are withheld by their employer and sent to us. The amounts withheld will be credited against the employee’s income tax liability when they lodge their income tax return after the end of the financial year. Employees will not have to account for GST. Records of expenditure will still needed to be provided to your employer. The employer is considered to be the person providing taxi travel.

27/10/03

What is the definition of a limousine?
This issue is a public ruling for the purposes of section 105-60 of Schedule 1 of the TAA.

As with taxi drivers, the driver of a limousine involving the transportation of passengers for fares is required to register for GST.
The term ‘limousine’ is not defined in the GST Act and therefore takes its ordinary meaning which would include large luxurious motor vehicles.

17/12/03

What happens if I do not register for GST?
Non-interpretative - straight application of the law.

If you are a taxi driver, you are required to register for GST. If you do not, the Commissioner can register you and backdate your registration. You can also be subject to an administrative penalty for Failure to Register. The Commissioner is also able to make an assessment of your net GST amount for a tax period.

01/07/08

If I am a taxi driver and I also have another business, do I have to register both businesses?
Non-interpretative - straight application of the law.

In this situation, you as the entity, have two enterprises. You will only require one ABN and will only register once for GST. You will account for GST on both businesses in your activity statement. It does not matter if the other business has a turnover of less than $75,000 because, as a taxi driver, you are required to register irrespective of turnover. Accordingly, all your enterprises are included in the registration.
If enterprises are run by separate entities, each entity will be entitled to register independently. An example of this could occur if you as an entity carry on an enterprise of taxi travel and another business is conducted by a registered company. In this situation, you as an entity still must register your taxi driving enterprise but the company can choose not to register if its turnover is less than $75,000. If you are not registered, you do not remit GST to us, but cannot claim input tax credits for the GST included in the cost of your business acquisitions.

01/07/06

Do bailors who do not drive have to register for GST?
Non-interpretative - straight application of the law.

A bailor who does not drive is not providing ‘taxi travel’ and is not required to register for GST if his or her turnover is less than $75,000. If you are not required to register for GST, you should still consider applying for an ABN. If you do not have an ABN, your drivers will be required to withhold 46.5% of their pay-ins under the ‘No ABN Withholding’ rules and pay those amounts to us. You may register for GST even if you are not required to. Registering for GST is the only way you can claim the input tax credits you accrue during the course of your enterprise.

04/05/09

Should I register for fuel tax credits?
Non-interpretative - straight application of the law.

No. If you drive a light vehicle which travels on a public road, such as a taxi, car or small van you are not entitled to claim fuel tax credits.

04/05/09

What should I do if I have registered for fuel tax credits?
Non-interpretative - straight application of the law.

You can cancel your registration by either:
accessing the Business Portal (if you are registered to deal with us electronically)
completing the form Application to cancel registration (NAT 2955)
phoning 13 28 66 between 8.00am and 6.00pm, Monday to Friday.

[119] It appears that both the Respondent and the Applicant 41 are acting in accord with the ATO decisions as identified in this ATO document.

[120] The real difficulty posed by Exhibit R2 is that the “ATO decision” that:

“The driver is an employee when the driver is not entitled to keep any of the takings and is paid a set amount to drive the taxi”, and that,

“In unusual cases, a person may be an employee in the taxi industry. An employee works for the owner or leaseholder of a cab and is paid an hourly rate or weekly wage that is independent of the cab’s actual takings”

sets a test for determining the existence of an employer/employee relationship which is very much at odds with the case law.

[121] Having regard to the ATO information in Exhibit R2 it is not surprising that the Respondent would consider the Applicant not to be an employee given that from the outset of their relationship the Applicant and the Respondent agreed to a 48/52 split of fares. As the evidence of both the Applicant and the Respondent makes very clear, the Applicant was never “paid a set amount to drive the taxi” and was never “paid an hourly rate or weekly wage that is independent of the cab’s actual takings”.

[122] The existence of Exhibit R2 does not shift the weight attached to this criterion in favour of the Respondent. Rather the very existence of Exhibit R2 suggests that both the Respondent and the Applicant have arranged their obligations in relation to PAYG and GST taxes on the basis of a presumption as to the nature of their relationship which presumption is not based upon a proper application of the case law as applied to the facts of the relationship.

[123] It is important in the present matter that the “Tax Invoice/Statement” which identified the value of the services provided by the Applicant to the Respondent and the amount of GST included in the amount invoiced were all prepared by the Respondent and, very importantly, were only prepared by the Respondent after the termination of the relationship with the Applicant. 42 The Applicant never prepared or issued an Invoice to the Respondent. Each of these “Tax Invoice/Statements” mis-identifies the supplier of the services and the recipient of the services. The supplier of the services is identified as Jim Voros and the recipient of the services is identified as Alan Dick. The documents, on their face, show that the Respondent has supplied services for which the Respondent is to pay GST!

It is also important in the present matter that the Applicant never sought to acquire an ABN for the purpose of conducting his own business. Rather the Applicant obtained an ABN because the Respondent requested that the Applicant do so and because “every taxi driver in Australia was made to get an ABN”. 43 The Applicant’s assertion that “every taxi driver in Australia was made to get an ABN” is consistent with a reading of Exhibit R2.

[124] In the present matter this criterion is neutral in relation to determination of the real relationship existing between the Applicant and the Respondent.

Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks.

[125] The very specific manner of payment for work performed by the Applicant does not fit neatly within the concepts raised by this criterion.

[126] Whilst the 52/48 split of fares between the Applicant and the Respondent is not usual in the taxi industry, a 50/50 split of fares is more common and as the evidence in this matter discloses was applied by the Respondent to other taxi drivers he engaged. This method of payment is neither a wage nor salary nor is it a payment which is calculated by reference to completion of tasks. Whilst the amount of payment made to the Applicant is based upon a percentage of the fares received the payment is made to cover the whole period that the Applicant had custody of the taxi.

[127] In the present matter this criterion supports the contention of the Respondent that the Applicant was not an employee.

Whether the worker is provided with paid holidays or sick leave.

[128] The evidence of both the Applicant and the Respondent is clear that the Respondent never in all of the 16 years of the relationship provided the Applicant with any form of paid leave. The evidence also makes clear that the first time the Applicant sought paid leave entitlements was after the relationship had ended.

[129] In the present matter this criterion supports the contention of the Respondent that the Applicant was not an employee.

Whether the work involves a profession, trade or distinct calling on the part of the person engaged.

[130] The Applicant was engaged in a very distinct calling, namely, taxi driving. However, whilst taxi driving appears to have become a distinct calling this appears to have been a reflection of the continuing debate about whether a taxi driver is an employee or not. At its heart taxi driving is no more than vehicle driving and requires no special skills that are unique to the concept of taxi driving. The knowledge required of a taxi driver is similar to that required by courier drivers and delivery drivers.

[131] In the present matter this criterion is neutral as it neither supports nor detracts from the position adopted by either the Applicant or the Respondent.

Whether the worker creates goodwill or saleable assets in the course of his or her work.

[132] The very nature of the work of the Applicant as a taxi driver, given that the Applicant is driving the Respondent’s vehicle, is required to split the fares with the Respondent and is required to wear a uniform which does not identify the Applicant, suggests very strongly that there is no goodwill that is created or is attached to the work of the Applicant. It is also clear that there are no saleable assets that the Applicant has acquired through his work as a taxi driver for the Respondent. Even the Applicant’s list of his “customers” does not appear to be something that has either goodwill or saleable value. The relationship between the Applicant and his “customers” does not appear to be a business relationship but has the appearance of being a personal relationship.

[133] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Whether the worker spends a significant portion of his remuneration on business expenses.

[134] The evidence in this matter discloses that the worker spends little if anything on business expenses. The only identified possible business expense of the Applicant was in relation to business cards although no amount was identified. Further it is clear from the operation of the Transport (Taxi-Cabs) Regulations 2005 that the Applicant is required to spend part of his remuneration on a uniform. Again the amount spent is unknown but would appear to be minimal.

[135] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Other Criteria?

[136] The observation of the Full Bench in French Accent of the summary of the general law position, that “(f)eatures of the relationship in a particular case which do not appear in this list may nevertheless be relevant to a determination of the ultimate question” 44 is directly relevant in the present matter. The following features of the relationship between the Applicant and the Respondent are also relevant to determination of the ultimate question.

The intentions of the Applicant and the Respondent.

[137] The issue of the intentions of the Applicant and Respondent is important.

[138] In the Full Court of the Federal Court decision in De Luxe Red & Yellow Cabs the Court came to a concluded view as to the intentions of taxi drivers and taxi operators in NSW and this concluded view was then applied to all taxi drivers and operators in all States. The Full Court said:

[139] The evidence of the Applicant is that he was offered work by the Respondent and that he accepted the offer to drive for the Respondent 45 and that in the 16 years of the relationship between the Applicant and the Respondent that the Applicant worked for the Respondent46

[140] The evidence of the Respondent was that he would never engage a driver as an employee. 47

[141] The Applicant was never offered a document in writing to sign which identified the relationship existing between himself and the Respondent. The Applicant was neither offered a bailment agreement nor a contract of employment. 48 The establishment of a relationship between the Applicant and the Respondent was done orally.

[142] It is clear from the evidence in this matter that the Applicant never intended to create a bailor/bailee relationship and that the Respondent never intended to create an employer/employee relationship.

[143] However the evidence is clear that both the Applicant and the Respondent intended to create a relationship in which the Applicant drove a taxi operated by the Respondent and in return was to be paid 48% of the fares taken. It is this intended relationship which continued for 16 years until it was terminated by the Respondent in December 2012.

[144] The intentions of the Applicant appear to have real significance in determining the nature of the relationship that existed. Whilst the Applicant’s intentions cannot, of themselves, determine the question: Is the Applicant an employee of the Respondent? they do assist in answering the question: Is the Applicant a bailee of the Respondent’s taxi?

[145] As Palmer notes:

“a bailment cannot arise without a certain mental element on the part of the putative bailee. .....bailment comes into being whenever one person is knowingly and willingly in possession of goods that belong to another.” 49

[146] Palmer also notes that:

“In order to come into possession of a chattel it may therefore be necessary to prove not only a delivery of, or some permitted access to, the chattel, but that this has resulted in “a high degree of physical control” over the chattel in question, to the exclusion (at least) of the bailor.” 50

[147] In W D and H O Wills (Australia) Limited v State Rail Authority of New South Wales; State Rail Authority of New South Wales v TNT Management Pty Limited [1998] NSWSC 81, Mason P (with whom Priestly JA and Beazley JA agreed) said:

“It is one thing to conclude that it is not a prerequisite of a bailment that the bailor should have consented to the bailee’s possession of the goods. It is something entirely different to hold that a bailment or sub-bailment can come about in the absence of possession, consent or knowledge as regards the alleged bailee or sub-bailee.” 51

[148] In the present matter the Applicant’s evidence is to the effect that he never intended to take possession of the Respondent’s taxi, he merely drove it for the Respondent. The evidence in this matter as to the Applicant’s intention would deny the existence of a bailor/bailee relationship due to the lack of the requisite mental element on the part of the putative bailee.

[149] In the present matter the most that can be said of this criterion is that, on its own, it is neutral in relation to answering the ultimate question.

The Remuneration earnt by the Applicant.

[150] The ultimate question that must be answered is “whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part?”

[151] The evidence in the present matter as to the Applicant’s remuneration for 2012 is clearly identified in Exhibit R1 which comprises the daily trip sheets filled in by the Applicant each day he drove the Respondent’s taxi. This evidence discloses the following:

● In the period 1 January 2012 to 5 December 2012, which is 339 days, the Applicant worked 335 days
● The total hours worked by the Applicant over those 335 days was 3278 hours
● The daily average hours worked was 9.7
● The total fares recorded for the 339 days was $75,051.40
● The Applicant’s share of the total fares was 48% equalling $35,617.15
● The hourly rate earnt by the Applicant was $10.86 ($35,617.15 divided by 3278)

[152] Out of the money earnt by the Applicant he was expected to make provision for his own superannuation, annual leave and personal/carers leave.

[153] If the Applicant was paid as an employee under the terms of the Passenger Vehicle Transportation Award 2010 for the same work the Applicant would have earnt at least $66,576.01.

[154] This amount has been calculated on the following basis.

● The ordinary hourly rate of a taxi driver under the award is $17.64
● The overtime rate is $26.46 where overtime is paid at time and a half the ordinary hourly rate and $35.28 where overtime is paid at double the ordinary hourly rate.
● In the period between 1 January 2012 and 5 December 2012 which comprises 339 days the ordinary hours of work could be worked on no more than 243 days in accordance with clause 21.1 of the award.
● On each of the 243 days in which ordinary hours were worked only 7.6 hours would be paid at the ordinary time rate. If one hour was allowed for an unpaid meal break (clause 22.1 of the award) then 1.1 hours per day would be paid at the overtime rate.
● The remaining 96 days would have to be paid at the overtime rate.
● If one hour was allowed for an unpaid meal break (clause 22.1 of the award) on each overtime day then the 8.7 hours worked would be paid for on the basis of time and half for the first three hours and double time for the remaining 5.7 hours.

[155] The above calculations ignore any additional penalties that apply for

● early or late work (clause 23.6 of the award)
● working ordinary hours on weekends (clause 23.2 of the award)
● working on public holidays (clause 23.4 of the award), and,
● working more than 10 hours on any day (clause 21.3 of the award)

[156] The amount of $66,576.01 is made up of the following:

● 1846.8 ordinary hours (243 days x 7.6 hours) x $17.64 = $32,577.55
● 555.3 hours at time and a half (243 days x 1.1 hours and 96 days x 3 hours) x $26.46 = $14,693.24
● 547.2 hours at double time (96 days x 5.7 hours) x $35.28 = $19,305.22

[157] In addition to the $66,576.01 the Applicant would also have received the benefit of a superannuation contribution by his employer of $2931.98 (9% of $32,577.55) as well as an entitlement to paid annual and personal carers leave.

[158] Additionally if the Applicant had been treated as an employee the Applicant would for his 16 years have been entitled to long service leave, which as at the date of the termination of the relationship would have been at least 13 weeks pay or about $8714.16.

[159] Setting aside the issue of taxation, the comparison that emerges from the above calculations is that if the Applicant was running his own business then in 2012 he earnt a gross amount of $35,617.15 out of which he would have had to make his own provision for paid leave and superannuation.

[160] If however the Applicant was an employee he should have earned a gross amount of $66,576.01, and in addition would have had $2931.98 paid into his superannuation account and would have been entitled to paid annual leave and personal carers leave.

[161] The evidence of the Respondent was that the arrangements he had in place with his drivers to share the fares taken was to create an incentive to work harder:

“Well, driving taxis if you pay the wages there's no incentive to push along and you know have a reasonable taking, very, very few would do that. It is like the harder you work, the more you earn.” 52

[162] There is nothing in the material before me from the Respondent which explains how the Applicant could have worked harder and had the real potential to gain an additional $33,890 (the amount needed to equal the remuneration payable to an employee for the same work).

[163] I note in the context of considering the remuneration received by the Applicant that the Applicant had no capacity to increase the rate of fares charged to users of the taxi. 53

[164] Viewed as a practical matter the above analysis of remuneration does not support a contention that the Applicant was conducting a business of his own. Whilst it is not uncommon for persons who conduct their own business to accept remuneration below the minimum levels set by the modern awards and the NES there are generally some obvious commercial reasons for doing so such as in the start up phase of a new business or to protect an existing business from failing. In the present matter there is no evidence of any reason why the Applicant would conduct a business on the basis of accepting remuneration so significantly below the remuneration that would be paid to an employee doing the same work with the same pattern of hours of work. Viewed as a practical matter it appears completely implausible that the Applicant was conducting his own business on the basis of intending to receive remuneration so significantly inferior to that which an employee would have been entitled for the same work.

[165] In the present matter this criterion supports the contention of the Applicant that he is an employee of the Respondent.

Conclusion

[166] The analysis of each criterion considered above shows that, when considered separately, some criteria support the Applicant’s contention that he was an employee of the Respondent and some of the criteria support the contention of the Respondent that the Applicant was not the Respondent’s employee.

[167] The analysis does no more than identify the several details which need to be considered. The consideration of this accumulation detailed is to be approached in the manner described by the Full Bench in French Accent:

“The object of the exercise is to paint a picture of the relationship from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another. The ultimate question remains as stated: Whether the worker is the servant of another in that other’s business, or whether the worker carries on a trade or business of his or her own behalf: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own of which the work in question forms part?” 54

[168] Having taken the necessary step back and having taken a good look at the big picture painted from the accumulation of detail a clear and unambiguous picture is staring out from the canvas. The picture needs to be unambiguous because the Commission must make a finding as to a jurisdictional fact. The ultimate question cannot be decided upon the basis that it is “reasonably open” to the Commission to make a particular finding but has to be decided upon the basis that the jurisdictional fact exists. 55

[169] The Applicant was clearly and unambiguously not carrying on a business of his own but is clearly and unambiguously providing his personal labour to the Respondent for the benefit of the Respondent’s business. The Applicant was an employee of the Respondent.

Extension of Time Application

[170] The Applicant was dismissed on 5 December 2012 and the Applicant had 14 days after that date to file an application for an unfair dismissal remedy. The application was filed on 3 January 2013. The application was filed 15 days out of time. The Applicant seeks that the Commission extend the time required to file an application until and including 3 January 2013.

[171] Both the Applicant and the Respondent gave evidence in relation to this matter. In addition as part of the Applicant’s case concerned representative error the Applicant’s solicitor Mr Seoud gave evidence as to his conduct and advice to the Applicant.

[172] The relevant provisions of the Fair Work Act 2009 is s.394(2) and (3) which was, at the date of dismissal, as follows:

“(2) The application must be made:

(a) within 14 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

[173] Both the Applicant and the Respondent took me to a range of authorities relevant to determination of this aspect of the matter.

[174] The FW Act is predicated upon an applicant for an unfair dismissal remedy complying with the time limits specified in s.394(2)(a). The presence of s.394(2)(b) and (3) are not intended create a simple alternative time frame for making applications. The very language of s.394(3) makes clear that the Commission has to be positively satisfied that there are exceptional circumstances before an extension of time can be granted.

[175] In Nulty v Blue Star Group Pty Ltd the Full Bench said:

[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe “exceptional circumstances” as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural “circumstances” as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of “exceptional circumstances” includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.” 56

[176] Where representative error is relied upon by an applicant seeking an extension of time the authorities make clear that representative error does not give rise to an automatic entitlement to an extension of time but may (and it is put no higher than that) satisfy the requirement of being an exceptional circumstance necessary to justify an extension of time.

[177] In Robinson v Interstate Transport Pty Ltd the Full Bench said:

“[24] The approach to representative error as an acceptable explanation for late lodgement has been considered by Full Benches of Fair Work Australia and its predecessors in the context of various Acts. The approach followed was first set out by a Full Bench in Clark’s Case in the context of the exercise of a discretion to extend time under s.170CE(8) of the Workplace Relations Act 1996 (the WR Act). It was followed by a Full Bench in Davidson’s Case in relation to s.170CFA(8) of the WR Act. More recently, a majority of the Full Bench in McConnell’s Case found that the approach remained apposite to the exercise of the discretion in s.366(2) of the Act. We too think that the approach in Clark’s Case provides appropriate guidance for consideration of representative error in the context of the exercise of the discretion within s.366(2) of the Act. We think that representative error, in circumstances where the applicant was blameless, would constitute exceptional circumstances under s.366(2), subject to consideration of the statutory considerations in ss.366(2)(b) to (e) of the Act.

[25] The approach in Clark’s Case was summarised in Davidson’s Case as follows:

“In Clark the Commission decided that the following general propositions should be taken into account in determining whether or not representative error constitutes an acceptable explanation for delay:

(i) Depending on the particular circumstances, representative error may be a sufficient reason to extend the time within which an application for relief is to be lodged.

(ii) A distinction should be drawn between delay properly apportioned to an applicant’s representative where the applicant is blameless and delay occasioned by the conduct of the applicant.

(iii) The conduct of the applicant is a central consideration in deciding whether representative error provides an acceptable explanation for the delay in filing the application. For example it would generally not be unfair to refuse to accept an application which is some months out of time in circumstances where the applicant left the matter in the hands of their representative and took no steps to inquire as to the status of their claim. A different situation exists where an applicant gives clear instructions to their representative to lodge an application and the representative fails to carryout those instructions, through no fault of the applicant and despite the applicant’s efforts to ensure that the claim is lodged.

(iv) Error by an applicant’s representatives is only one of a number of factors to be considered in deciding whether or not an out of time application should be accepted.” 57

[178] The Applicant contended that there were two reasons for the delay in filing the application within the prescribed time.

“First: personal and family reasons occasioned by the requirement to vacate the family home 4 days before Christmas.

On 29 November 2012, shortly prior to being dismissed from his job on 5 December 2012, the Applicant received a notice to vacate his residence by 21 December 2012.

The personal upheaval caused to the Applicant and his family by these events pre-occupied him in the immediate weeks after being dismissed from his job. The focus of his attention was to protect his family and his home before turning his attention to the issue of his dismissal.

The Applicant rented his home from the Respondent and/or his wife since 2002 and in the months preceding the dismissal, a dispute arose between the parties in respect of the rental property. The Respondent and/ or his wife claimed that there were outstanding monies owed by the Applicant for rent of the property. The Applicant does not dispute this.

However, the Applicant raised concerns with the Respondent about the health and safety of his family due to the poor state of the property and for these reasons did not pay certain money owing for the house rental.

The dispute culminated in the notice to vacate served on the Applicant.

In response to the notice to vacate, on 4 December 2012, the Applicant wrote to the Respondent advising him of the repairs required of the house and claiming certain monies which he said were owing in respect of his work as taxi driver for the Respondent.

The following day, on 5 December 2013, the Applicant was dismissed from his job.

While this dispute is not directly relevant to the delay, it provides a context to the dismissal on 5 December 2012.

Second: representative error.

On 9 December 2012, the Applicant attended the office of Mr Seoud, Solicitor and sought legal advice in respect of both the notice to vacate the property and the dismissal from his job.

While advice and assistance was given in respect of both issues, the focus of the assistance concerned protecting the Applicant from being evicted in the first instance.

Significantly, Mr Seoud failed to inform the Applicant that there was a 14- day time limit in respect of an unfair dismissal application.

In the event, the Applicant made the unfair dismissal application himself on 20 December 2012, which he says he sent by post on that day. Had he been aware of the time limitation, it is submitted that he would have prioritised this matter more than he did.

That the Commission did not receive the application until 3 January 2013 may in part also be explained by the intervening Christmas break.

In circumstances where the solicitor failed to advise in respect of time limits, it is submitted that this error should not be visited upon the Applicant.”

[179] The Respondent contended that:

“The reasons for failure to file the application appear to be based on a dispute between the Applicant and the Respondent's wife over the continued occupation of her house at Reservoir. The Applicant's first reference to money was a demand for $8,524.00 on 4 December. This was for expenses that were consistent with a contract of hire. Complaints about the rate of percentage, and time when he was not able to use the taxi. He was seeking a set off. The Applicant was in possession of legal advice on or before 12 December 2012, when a letter of demand was sent from Seoud lawyers to Glennister solicitors. The solicitors were threatening a claim to Work Fair for unlawful dismissal.

There is no explanation for the delay in lodging the application and it is submitted that as in this case, the time should not be extended. The Applicant had made threats of issuing an application on 12 December and no explanation has been proffered why that did not occur.”

[180] The evidence of both the Applicant and the Respondent identify that there had been a dispute about unpaid rent on the house that the Applicant was renting from the Respondent and/or his wife. This dispute had been in existence for some time.

[181] On 29 November 2012 solicitors for the landlord (the Respondent and/or his wife) identified that the Applicant was in arrears for the rent of the house to the sum of $5,933.00. Given that the rental was $250 per week then the Applicant was in arrears for 23.732 weeks rent.

[182] The letter of 29 November required that the Applicant vacate the house by 21 December 2012.

[183] On 4 December 2012 the Applicant responded to this letter by making a claim on the Respondent and his wife for monies the Applicant claimed were owed to him over the 16 years he had been driving the Respondent’s taxi. The Applicant also wrote to the Respondent’s solicitor attaching a copy of the claim made on the Respondent and his wife as well as listing a number of significant defects with the house and alleged that the Applicant’s daughter had suffered significant health issues as a direct result of these defects.

[184] The Respondent dismissed the Applicant on 5 December 2012.

[185] It was the Applicant’s daughter (who was in Year 10 at the time but studying Year 11 Legal Studies) who suggested to her father that he may have a right to an unfair dismissal remedy. 58

[186] The Applicant first sought legal advice in relation to the eviction notice and the dismissal when he attended the office of Mr Seoud on 9 December 2012.

[187] The evidence of Mr Seoud is clear.

● Mr Seoud does not practice in the field of employment law or industrials relations law. 59

● Mr Seoud was a practitioner in the field of commercial litigation, commercial work and property work. 60

● Mr Seoud did not know that there were time limits for making an unfair dismissal application. 61

● Mr Seoud did advise the Applicant to seek advice from Fair Work Australia but did not set any time limits for that to occur.

● Mr Seoud accepted that there was real urgency in relation to the Applicant’s matters concerning the notice to vacate the house but not the dismissal. 62

● Mr Seoud was suffering an illness at this time and was constantly out of the office between 12 December 2012 and 22 December 2012.

[188] I accept that Mr Seoud’s evidence was open and honest and was given even though it clearly goes against him in relation to his professional conduct.

[189] It is clear from the language of the letter sent by Mr Seoud to the Respondent’s solicitors on 12 December 2012 that Mr Seoud’s knowledge of employment and industrial relations law is minimal. The following sentence of the letter is illustrative of this.

“Our client also was terminated without cause, and this matter will be referred to fair work Australia for wrongful dismissal together with a request for all annual leave, long service leave and overtime payments since the commencement of his employment sixteen (16) years ago.”

Wrongful dismissal is not a term used in the FW Act. The FW Act and its predecessors have clearly provided for a limit of 6 years in which to claim underpayments.

[190] It is clear from the evidence of the Applicant that Mr Seoud played no role in the Applicant eventually filling in an application for an unfair dismissal remedy and filing it with the Commission.

[191] The Applicant’s daughter filled in the application and the Applicant signed it on 20 December 2012. 63

[192] The application was then posted by the Applicant’s wife before Christmas. 64

[193] The application was in the Australia Post system on 28 December 2012 when the envelope was date stamped within Australia Post. 65

[194] The application was received at Fair Work Australia on 3 January 2013.

[195] Section 394(3) of the FW Act requires that I take into account each of the criteria listed in that sub section before I can form a view in relation to the existence or the absence of exceptional circumstances.

Reason for the delay

[196] I accept that there were two distinct reasons for the delay in filing the application for an unfair dismissal remedy. Firstly, the priority attached by the Applicant to addressing the demand that he vacate his residence by 21 December 2012 is reasonable and expected. Seldom would a person be in the position of having two serious matters to contend with simultaneously, namely fighting an eviction order and pursuing an unfair dismissal remedy, especially where the landlord and the employer are related. Secondly, the failure of the Applicant’s legal representative to know the time limits attached to making an application for an unfair dismissal remedy and the Applicant’s reliance upon his legal representative which in the circumstances of the present matter was reasonable.

Whether the Applicant first became aware of the dismissal after it had taken effect.

[197] The Applicant acknowledges that he was told of the dismissal by text on the day it occurred.

Any action taken by the Applicant to dispute the dismissal.

[198] The evidence is clear that within 4 days of the dismissal having taken effect the Applicant attended his legal representative to pursue action to dispute the dismissal. Specifically the Applicant relied upon his legal representative to either pursue the requisite action or to give appropriate advice to enable the Applicant to pursue action to dispute the dismissal.

Prejudice to the Respondent (including prejudice caused by the delay)

[199] The Respondent contends that he will suffer prejudice by any grant of an extension of time. The contention was put in the following terms:

“In this instance, the Respondent has deposed to having after a period of a week manage to get a new agreement for hire of the taxi. It is inherent from that statement that he has replaced the Applicant and there would be significant prejudice to the employer were he to have to re-employ the Applicant, if it were found that Mr Dick was an employee and that he had been wrongfully dismissed.”

[200] The prejudice identified is no more and no less than the prejudice that the Respondent would face if the application had been filed in time. There is no suggestion of prejudice which is directly attributable to a delay of 15 days in the filing of the application.

The merits of the application

[201] Normally in a matter in which the Commission is only dealing with preliminary jurisdictional issues there is little evidence that goes to the merits of the application. Whilst this criterion requires that the Commission takes into account the merits of the application it does so by considering what is before it.

[202] As a Full Bench noted in Kyvelos v Champion Socks P/L 66: “Evidence is rarely called on the merits and there are sound reasons why the Commission should not embark on a detailed consideration of the substantive case in an application” for an extension of time for the lodgement of the application.

[203] In the present matter the Respondent has put before the Commission an amount of material which is directly related to the merits of the case. The document titled “Summary of Alan Dick Takings” was presented to the Commission by the Respondent but remains untested as to its veracity. I also note that neither the Applicant nor the Respondent took me to this material in relation to the Respondent’s claim that the Applicant had withheld nearly $2500 from takings over a number of years.

[204] In the circumstances of the present matter this criterion is neutral as between the Applicant and the Respondent.

Fairness as between the Applicant and other persons in a similar position

[205] This criterion requires that I consider the fairness in either granting or refusing the Applicant’s request for an extension of time on the basis of the fairness of granting or refusing an extension of time to another person who was in the same position as the Applicant. In the unique circumstances of this matter it is hard to imagine that there is ever likely to be an employee who is both an employee and a tenant of his employer (or a tenant of his employer’s wife) and where the employee is dismissed within a period of notice to vacate the house being rented and where the employee’s solicitor is ignorant of the time limits in the FW Act and through such ignorance the employee fails to file his application on time. In the context of such unique circumstances I am of the view that what would be fair to the Applicant would be fair for other employees who found themselves in the same unique position.

Conclusion

[206] I have considered each of the factors specified in s. 394(3) and I am satisfied that in the present matter there were clearly a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon. I am satisfied there are exceptional circumstances in the present matter and that I should exercise my discretion to grant an extension of time in which the Applicant can file an application for an unfair dismissal remedy until and including 3 January 2013.

Disposition of the Matter

[207] Having decided that the Applicant is an employee and that an extension of time in which to make the application has been granted, I will refer the file in this matter to the Panel Head for allocation to a Member to deal with the merits of the application.

COMMISSIONER

Appearances:

Ms N Blok of Counsel for the Applicant

Mr M Simon of Counsel for the Respondent

Hearing details:

2013.

Melbourne:

May 31

1 Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1994] HCA 54 at [46]

2 Exhibit R1.

3 Transcript PN113

4 The Applicant wrote to the Respondent on 4 December 2012 claiming an amount of $1000 for unpaid rebate of rental.

5 De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd & Ors v Commissioner of Taxation [1997] FCA 840.

6 Ibid.

7 Ibid.

8 Ibid.

9 Commissioner of Taxation of the Commonwealth of Australia v De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd & Ors [1998] FCA 361.

10 Ibid.

11 Ibid.

12 Emjay Motors Pty Limited v Armstrong , unreported, Supreme Court of Victoria, 24 August 1995.

13 Ibid 19-20.

14 Ibid 43.

15 Dillon v Grange [1941] HCA 5; (1941) 64 CLR 253.

16 Emjay Motors Pty Limited v Armstrong, unreported, Supreme Court of Victoria, 24 August 1995 at pp22-23.

17 MA000063.

18 [2009] AIRCFB 826.

19 Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties [1975] 1 NSWLR 346.

20 NSW Industrial Gazette Vol 168 at p. 33, Jan-Mar 1968

21 McDougal v Castlemaine Taxis Pty Ltd, PR921199.

22 Palmer on Bailment, 3rd edition, 2009 1-001 and 1-002.

23 Ibid at 1-003 - 1-012.

24 Ibid 7-001.

25 Ibid 3-083.

26 Ibid 3-083.

27 Commissioner of Taxation of the Commonwealth of Australia v De Luxe Red & Yellow Cabs Co-Operative (Trading) Society Ltd & Ors [1998] FCA 361

28 Forstaff v The Chief Commissioner of State Revenue [2004] NSWSC 573.

29 Jiang Shen Cai trading as French Accent v Do Rozario [2011] FWAFB 8307.

30 Abdalla v Viewdaze P/L, PR927971.

31 Sammartino v Commissioner Foggo [1999] FCA 1231,[8].

32 Exhibit R3, Witness Statement of James Voros, [3] and [4].

33 Transcript PN14.5

34 Transcript PN612.

35 Ibid PN598.

36 Ibid PN372.

37 Transcript PN141-150.

38 Ibid PN756.

39 Exhibit R3 [19].

40 Exhibit R2.

41 Transcript PN293-306.

42 The Tax Invoice/Statements for the period from January 2007 to September 2012 were put before the Commission but were not marked as an exhibit.

43 Transcript PN293.

44 [2011] FWAFB 8307 [4].

45 Transcript PN118.

46 Ibid PN123-124, PN130, PN136, PN350, PN353.

47 Ibid PN519-520

48 Ibid PN91, PN240, PN598

49 Palmer on Bailment, 3rd edition, 2009 1-002.

50 Ibid, para 1-134.

51 Cited in Palmer at 6-002.

52 Transcript PN520.

53 See the description of the regulatory regime for taxis in Victoria given by a Full Court of the Federal Court in Commissioner of Taxation v Secretary to the Department of Transport (Victoria) [2010] FCAFC 84, paras 4 to 17.

54 [2011] FWAFB 8307.

55 Damevski v Giudice [2003] FCAFC 252 per Marshall J at paras 103 - 122.

56 Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975 [13].

57 Robinson v Interstate Transport Pty Ltd, [2011] FWAFB 2728.

58 Transcript PN261.

59 Ibid PN489.

60 Ibid PN490.

61 Ibid PN485.

62 Ibid PN486.

63 Ibid PN380-81.

64 Ibid PN383-86.

65 Ibid PN798, PN802, PN807.

66 Print T2421.

Printed by authority of the Commonwealth Government Printer

Updated	Issue	ATO decision
22/03/00	Do taxi drivers have to register for GST? Non-interpretative - straight application of the law.	Yes. If you drive a taxi, then you must register for goods and services tax (GST). It does not matter how often you drive a taxi. If the driver is an employee, then the driver must not register for GST. The driver is an employee when the driver is not entitled to keep any of the takings and is paid a set amount to drive the taxi. In these limited circumstances, the employer is considered to be the person providing taxi travel and must register for GST.
01/07/08	Why do drivers have to register for the GST irrespective of turnover? Non-interpretative - straight application of the law.	For other businesses, the GST registration turnover threshold is $75,000. For taxi drivers, including chauffeur driven limousines and hire cars, there is no registration turnover threshold. This means that anyone who drives a taxi, chauffeur driven limousine or hire car, must register for GST, unless they are an employee for pay as you go withholding (PAYG withholding) purposes. The government chose to apply compulsory registration of taxi drivers for several reasons including: ● to avoid the confusion that would be created if some taxis had to charge GST and others did not ● avoiding the added problem that would arise if a passenger was using a taxi for a business trip (creditable acquisition). In this instance, the passenger would want to be able to claim an input tax credit for the GST included in the fare ● meter rates are set by each state authority and after 1 July 2000 all meters were adjusted to reflect the GST. If some drivers were registered and others were not, all would be collecting the higher rate. This would disadvantage drivers who had to be registered if the ordinary registration turnover threshold applied.
01/07/08	Do owners have to register? Non-interpretative - straight application of the law.	Owners who also drive some shifts are also required to register for GST regardless of their turnover. Owners who do not drive shifts and just lease out the license and cab are not supplying taxi travel and have the choice of whether or not to register if their turnover is under $75,000. Like all other businesses, owners must register if their turnover exceeds $75,000.
27/10/03	What forms have to be completed? Non-interpretative - straight application of the law.	Taxi drivers have to complete an Australian business number (ABN)/GST registration form. New drivers who commence after 1 July 2000 must register within 21 days of commencing a business as a taxi driver. You also have to complete an activity statement for each quarterly or monthly tax period. A tax period is every three months for most drivers, but is every month for businesses with a turnover in excess of $20 million. Drivers that are eligible for quarterly tax periods can also elect to use monthly tax periods. The activity statement asks for information required to determine your PAYG and GST obligations.
27/10/03	When is a driver an employee or under a bailment arrangement?	Most drivers are under a bailment arrangement. This means that you make a payment of some kind that allows you to use the taxi to drive. The payment could be in the form of lease payments or an amount that is paid in at the end of each shift. It does not matter whether the amount is a set amount or a percentage of the shift takings. In unusual cases, a person may be an employee in the taxi industry. An employee works for the owner or leaseholder of a cab and is paid an hourly rate or weekly wage that is independent of the cab’s actual takings. Employees are subject to PAYG withholding on their earnings. That is, amounts of tax are withheld by their employer and sent to us. The amounts withheld will be credited against the employee’s income tax liability when they lodge their income tax return after the end of the financial year. Employees will not have to account for GST. Records of expenditure will still needed to be provided to your employer. The employer is considered to be the person providing taxi travel.
27/10/03	What is the definition of a limousine? This issue is a public ruling for the purposes of section 105-60 of Schedule 1 of the TAA.	As with taxi drivers, the driver of a limousine involving the transportation of passengers for fares is required to register for GST. The term ‘limousine’ is not defined in the GST Act and therefore takes its ordinary meaning which would include large luxurious motor vehicles.
17/12/03	What happens if I do not register for GST? Non-interpretative - straight application of the law.	If you are a taxi driver, you are required to register for GST. If you do not, the Commissioner can register you and backdate your registration. You can also be subject to an administrative penalty for Failure to Register. The Commissioner is also able to make an assessment of your net GST amount for a tax period.
01/07/08	If I am a taxi driver and I also have another business, do I have to register both businesses? Non-interpretative - straight application of the law.	In this situation, you as the entity, have two enterprises. You will only require one ABN and will only register once for GST. You will account for GST on both businesses in your activity statement. It does not matter if the other business has a turnover of less than $75,000 because, as a taxi driver, you are required to register irrespective of turnover. Accordingly, all your enterprises are included in the registration. If enterprises are run by separate entities, each entity will be entitled to register independently. An example of this could occur if you as an entity carry on an enterprise of taxi travel and another business is conducted by a registered company. In this situation, you as an entity still must register your taxi driving enterprise but the company can choose not to register if its turnover is less than $75,000. If you are not registered, you do not remit GST to us, but cannot claim input tax credits for the GST included in the cost of your business acquisitions.
01/07/06	Do bailors who do not drive have to register for GST? Non-interpretative - straight application of the law.	A bailor who does not drive is not providing ‘taxi travel’ and is not required to register for GST if his or her turnover is less than $75,000. If you are not required to register for GST, you should still consider applying for an ABN. If you do not have an ABN, your drivers will be required to withhold 46.5% of their pay-ins under the ‘No ABN Withholding’ rules and pay those amounts to us. You may register for GST even if you are not required to. Registering for GST is the only way you can claim the input tax credits you accrue during the course of your enterprise.
04/05/09	Should I register for fuel tax credits? Non-interpretative - straight application of the law.	No. If you drive a light vehicle which travels on a public road, such as a taxi, car or small van you are not entitled to claim fuel tax credits.
04/05/09	What should I do if I have registered for fuel tax credits? Non-interpretative - straight application of the law.	You can cancel your registration by either: accessing the Business Portal (if you are registered to deal with us electronically) completing the form Application to cancel registration (NAT 2955) phoning 13 28 66 between 8.00am and 6.00pm, Monday to Friday.