L. -v- TDT Visions Pty Ltd Trading As Gutter-Vac Tasmania [2013] TASWRCT 22 (29 May 2013)  

Background

The Applicant commenced work for the Respondent, Gutter-Vac Tasmania on 5 July 2011, which involved cleaning guttering and working at heights. The Applicant had no previous gutter cleaning experience, and had only completed a working-at-heights course in September 2010. 

On 25 November 2011, the Applicant fell from a residential roof whilst cleaning its guttering, and sought workers’ compensation.  

The Respondent disputed that the Applicant was entitled to receive workers’ compensation payments. The Respondent contested that the Applicant did not satisfy the definition of ‘worker’ for the purposes of the legislation, which was defined as those persons performing work under a contract of service (i.e. as an employee). Instead, the Respondent contested that the Applicant was engaged as an independent contractor.  

It was therefore necessary for Commissioner Chandler to determine whether the worker was an employee or a contractor.  

Assessing the relationship

Commissioner Chandler undertook a detailed assessment of the entirety of the working relationship.  

The Commissioner considered that there were aspects of the relationship that tended to indicate that the worker was not an employee. Relevantly, the worker had obtained an ABN, was paid upon presentation of a tax invoice, did not receive superannuation contributions, no income tax was deducted, and the worker did not receive leave.  

However, these indicia were outweighed when the Commissioner came to consider the Applicant’s (rather ambiguous) written terms of engagement, entitled “Subcontractor Employment Contract”, as well as other aspects of the relationship.  

The Applicant’s written terms contained numerous references to the word ‘employee’/ ‘employment’, required the Applicant to attend training, required the Respondent to indemnify the Applicant in relation to work performed by the Applicant, and also authorised the Respondent to deduct taxation from the Applicant’s ‘salary’ (although this in practice did not occur as the Applicant invoiced the Respondent for work performed). Additionally, the written terms also did not include an acknowledgement that the parties intended to create a relationship of principal/contractor.  

The Commissioner also held that a number of other indicia tended to favour an employment relationship. Importantly, the Commissioner found that the Respondent exercised a significant amount of ‘control’ over the manner in which the gutter cleaning work was performed. The Commissioner also found that the worker:  

  • did not have a registered business name, advertising material, tools of trade or any customers  
  • used the Respondent’s equipment  
  • travelled in the Respondent’s vehicle, which was marked with the Respondent’s signage  
  • wore clothes stipulated by the Respondent  
  • carried pamphlets that advertised the Respondent’s business (which he was also required to distribute)  
  • set up a sandwich board at each work site, advertising the Respondent’s business, and  
  • had the authority to give quotations on behalf of the Respondent.

In conclusion, the Commissioner held that the relationship was very clearly one of employment, and the worker was entitled to workers’ compensation payments.  

Conclusion and tips

Organisations that propose to engage workers as contractors need to carefully consider whether the substance of the relationship actually matches the label. Although in this case there were numerous indicia which made it difficult for the Respondent to show that the worker was a contractor, the decision also serves as a reminder for organisations to ensure that the written terms by which it engages contractors, are not ambiguous. Whilst it will not be determinative of the substance of the relationship, the written terms should include express wording that makes it clear that the parties intended to create a principal/contractor relationship, and not an employment relationship.