WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES THE CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF WORKERS

APPELLANT

-and-

BHP BILLITON IRON ORE PTY LTD

FIRST RESPONDENT

INTEGRATED GROUP LTD T/AS INTERGRATED WORKFORCE

SECOND RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER A R BEECH

  COMMISSIONER S J KENNER

DATE FRIDAY, 10 JUNE 2005

FILE NO. FBA 36 OF 2004

CITATION NO. 2005 WAIRC 01797

CatchWords  Industrial Law (WA) – Joint employment – Refusal to employ – Alleged ostensible/apprehended bias – Doctrine of necessity – Application to intervene in appeal – Notice to Attorneys General – Application to adduce fresh evidence – Australian Workplace Agreement operation and effect – Labour hire agreement – Contract of employment – Implied contract – Control – Casual employment – Temporary employment – Abandonment/tacit agreement to terminate employment – Mutuality of obligation – Validity of any orders – Industrial Relations Act 1979 (as amended), s7, s17, s26, s26(1)(a), s30, s44, s49 – Industrial Relations Commission Regulations 1985, regulations 29(2) and 92 – Commonwealth of Australia Constitution Act, s109 – Judiciary Act 1903 (Cth), s78B - Australian Workplace Relations Act 1996 (Cth), s170VQ(4), Part VID – Mines Safety and Inspection Act 1994 (as amended) – Mines Safety and Inspection Act Regulations 1995 (as amended) – Minimum Conditions of Employment Act 1993, s5

Decision  Appeal upheld and decision at first instance varied

Appearances 

Appellant   Mr D H Schapper (of Counsel), by leave

First Respondent  Mr H J Dixon (of Counsel), by leave, and with him Mr F M Gaffney (of Counsel), by leave

Second Respondent  Mr N D Ellery (of Counsel), by leave, and with him Ms L D’Ascanio

Intervener  Mr A D Lucev (of Counsel), by leave, and with him Ms W Endebrock-Brown (of Counsel), by leave

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1         This is an appeal by the above-named appellant, The Construction, Forestry, Mining and Energy Union of Workers (hereinafter referred to as “the CFMEU”), against the whole of the decision of the Commission at first instance, constituted by a single Commissioner, given on 13 September 2004 in application No CR 128 of 2004.

2         By that decision, the application of the CFMEU at first instance was dismissed.

GROUNDS OF APPEAL

3         The CFMEU now appeals against that decision on the following grounds, as amended on appeal (see tab 1 of the appeal book (hereinafter referred to as “AB”), volume 1):-

“1. The Commission erred in holding that there was not a contract of employment between Brandis and the first respondent. The Commission ought to have held that there was such a contract either jointly with the first and second respondents; alternatively, with the first respondent.

2. Having erred as set out in paragraph 1, the Commission further erred in not then requiring the first respondent to employ Brandis on the award.

3. The Commission erred in holding that the refusal of the first respondent to employ Brandis was not unfair in that:

3.1 the Commission applied the wrong test by asking whether the decision not to employ Brandis was reasonably open.  The test that should have been applied was whether the refusal to employ Brandis was unfair in all the circumstances, including whether the basis on which the decision to refuse to employ had been made was sound.

3.2 the Commission failed to examine the basis on which the decision to refuse to employ Brandis had been made

3.3 the Commission failed to determine whether the basis on which the decision to refuse to employ Brandis had been made was sound, which it was not

3.4 the Commission erred in holding that the decision not to employ Brandis was reasonably open when the basis on which the decision was made was demonstrated to be wholly or largely unsound or otherwise insufficient

3.5 the Commission erred in failing to find that, in view of Brandis’ continuous and continuing de jure or de facto employment at BHP for 3 years, the refusal to employ him was unfair in the absence of some compelling reason not to do so”

4         The appeal is brought under s49 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”).  At all material times, the appellant was an “organisation” of employees, as that term is defined in s7 of the Act.

5         The above-named first respondent, BHP Billiton Iron Ore Pty Ltd (hereinafter referred to as “BHPB”), was, at all material times, an employer; and the above-named second respondent, Integrated Group Ltd trading as Integrated Workforce (hereinafter referred to as “IW”), was a labour hire agency.

6         At all material times, as is well known in this Commission, BHPB conducted and continues to conduct huge mining operations in the Pilbara region of this State.  At all material times, the CFMEU has represented locomotive engine drivers who worked for BHPB and represented Mr Brandis in this case.

7         At all material times, as part of its mining operations, BHPB operated a very busy railway system with very large, heavily laden trains, carting iron ore from the mines at Newman and other locations to Port Hedland for shipping.

8         The decision appealed against was made after a hearing where the application was opposed by the above-named respondents.

BACKGROUND

The Application

9         The CFMEU brought an application in the Commission, filing it on 10 June 2004, seeking a s44 conference on the grounds that “the respondent unreasonably refuses to employ Greg Brandis as an engine driver”.  Mr Brandis had previously worked as an engine driver for BHPB for some years and, more recently and currently, for over three years, initially at least through IW.  Mr Brandis had recently applied for direct employment with the respondent which refuses to employ him.

10      A conference was sought and held and no agreement was reached, as a result of which the Commissioner issued a memorandum of matters for hearing and determination dated 20 July 2004 which appears in the appeal book behind tab 2.

11      The memorandum of dispute recites that the CFMEU alleged that:-

“1. During the time that Mr Brandis has been employed by IW to work at BHPB he has also been employed jointly by BHPB.  This is by reason of the fact that throughout that time Mr Brandis has, in all material respects, been directed and supervised by BHPB; and

2. BHPB have unreasonably refused to employ Mr Brandis.”

12      The memorandum recites that the CFMEU claims:-

“1. a declaration that Mr Brandis has been and is employed by BHPB as an engine driver; and

2. an order that BHPB employ Mr Brandis on the award.”

13      The memorandum also recites that the respondents refuted the CFMEU’s claim, denied that the Commission had jurisdiction to make the declaration or order sought by the CFMEU, and objected to the relief sought.

Evidence and Facts

14      Evidence in chief was given at first instance by way of written witness statements.  These included for the CFMEU Mr Gregory James Brandis and Mr Warren Ronald Johncock, a locomotive engine driver employed by BHPB.  For IW, Mr Craig Bruce Hudson, that company’s National Manager, Mining and Resources, gave evidence.  For BHPB, Ms Rochelle Marie Rayner, Human Resources Adviser, Mr Geoffrey Charles Jolly, Superintendent - Railroad Operations, Mr Colin John Gibbons, Rail Transport Supervisor, Mr Anthony Holland, Superintendent - Rules and Accreditation, and Mr Michael Ian Hoare, BHPB’s Senior Human Resources Adviser, all of them BHPB’s employees.

15      Mr Brandis is an engine driver with almost 30 years of experience driving locomotives, primarily on the BHPB network during that time.  During that time, too, his service as an employee and engine driver would have to be judged at least as competent, and perhaps higher than that.  This was partly borne out, the Commissioner at first instance found, by the fact that BHPB would not leave an incompetent driver in charge of a train on their rail network for safety and potential cost reasons alone.

16      He was assessed by his supervisor, Mr Zanders, as follows “Greg performed his work as an engine driver in a competent manner”.  He was therefore acceptable or adequate as an engine driver.

17      He was assessed by his foreman as a very conscientious employee in May 1999 when he resigned from his employment upon accepting voluntarily that his position had been made redundant.

18      Mr Zanders, his supervisor, also said that Mr Brandis was suitable for rehire in the same capacity as an engine driver, and the then Employee Relations Manager of BHPB, Mr Keith Glenn Ritchie, also indicated that Mr Brandis was suitable for rehire.

19      Two years later in June 2001, having been engaged by IW, he returned to drive “on hire” on the BHPB rail network.  There is no evidence of any written agreement between Mr Brandis and IW having been entered into at that time or between IW and BHPB.  The terms of any oral agreements or any other agreements evidenced in writing were not in evidence.  Before being so “hired”, he was inducted and assessed as competent to operate trains by a Rail Transport Supervisor, Mr Gibbons, and was reassessed at six month intervals, also by BHPB.  He was assessed and passed out to drive the new and most modern locomotives and it can be assumed on the evidence that he has been driving for the last three and more years without incident except for a breach of safety rules and regulations in August 2002.  There were some other minor incidents mentioned in Mr Jolly’s statement, but nothing seemingly serious and nothing which required further action.

20      The investigation which took place on 6 and 7 August 2002 after a train driven by Mr Brandis passed node 3 which was at stop on Monday, 5 August 2002, found that he:-

(a)          Overrode the ATP on 10 occasions without authority

(b)          Went past node 3 whilst it was set at stop.

(c)          Knowingly breached operating procedures by his own admission.

21      This was found by the Commission to be a very serious breach of BHPB rules, operating procedures and operating notices.  However, based on his previous good record and frank admission about what occurred on this occasion, Mr John Ireland, Superintendent of Forward-Planning, in his memorandum to Mr Craig Hudson dated 9 August 2002, said that he believed that a formal warning and a suspension of his next tour from 16 September 2002 to 27 September 2002 would be an adequate consequence.

22      He was penalised with suspension for the period of one tour of duty only.  He was not dismissed or advised that his continued engagement was in jeopardy.  Mr John Ireland rightly took account of his honesty and his previous good record and did not require Mr Brandis’ dismissal.  However, he was not sent for further training.

23      There was a minor incident in May 2002 when he caused some damage to a platform ramp, but he was not disciplined for this.  There was, therefore, the Commissioner at first instance found, little challenge to his competence as a driver and his ability to continue to drive on the BHPB network.

24      The CFMEU’s complaint was that in January 2004 BHPB advertised for applications to be made to it for employment as rail transport technicians to drive locomotives on its railways in the Pilbara.  Mr Brandis applied for one of these positions and underwent pre-employment interviews, psychological testing and “reference” checks.  His application for employment was refused, as was a subsequent one.  He continued to drive locomotives for BHPB after August 2002 and after his application for so-called permanent employment as a locomotive driver in 2004 was rejected.

25      There was a great deal of discussion of the terms of two written agreements, one between BHPB and IW, and the other, an Australian Workplace Agreement (hereinafter referred to as an “AWA”) between Mr Brandis and IW, which were dated 11 June 2001 and 7 October 2002 respectively.  The AWA came into being and was accepted and registered under the Australian Workplace Relations Act 1996 (Cth) (hereinafter referred to as “the WR Act”).  I will refer to these agreements in detail later in these reasons.

26      I would also add that the operation of the BHP Pilbara Railway System and the application of rules and regulations to it in relation to safe working have been considered by Full Benches of this Commission in The Construction, Forestry, Mining and Energy Union of Workers v BHP Billiton Iron Ore Pty Ltd (2004) 84 WAIG 1033 (FB) (“Rudland’s Case”); BHP Billiton Iron Ore Pty Ltd v The Construction, Forestry, Mining and Energy Union of Workers (2004) 84 WAIG 3769 (FB) (“Cupak’s Case”); and The Construction, Forestry, Mining and Energy Union of Workers v BHP Billiton Iron Ore Pty Ltd (2004) 84 WAIG 3456 (FB) (“Hellmrich’s Case”).

FINDINGS OF THE COMMISSIONER AT FIRST INSTANCE

27      The Commissioner at first instance found that to make a case for refusal to employ then the applicant has to pass a relatively high hurdle to warrant the intervention of the Commission.  He found that Mr Brandis was a competent driver of long standing, and should, of course, be found to be suitable.  However, he found that any driver who operates on the BHPB network, who is re-assessed and passed as competent, should not necessarily be offered a permanent position.  The company is entitled to structure its workforce according to its needs, he found, and also pursuant to s26 of the Act and its general powers that the Commission should not interfere, on balance, unless it is necessary to rectify or prevent an unfairness or injustice.  The Commissioner held that he was unable to reach that conclusion in this matter of Mr Brandis’ non-selection for a permanent position with BHPB as an engine driver.

28      The order sought by the applicant was that BHPB employ Mr Brandis on the award.  It was submitted on behalf of BHPB that there was a distinction between a refusal to employ and a decision not to employ, and that there was no refusal in this matter.  The selection panel considered the matter, interviewed employees, including Mr Brandis, and, on the evidence of Ms Rayner, Mr Holland or Mr Jolly they did not consider him a candidate who ought to be employed.

29      The Commissioner found that the selection process itself was fair, and it necessarily involves value judgments.  The Commissioner concluded that on the evidence before them the panel was not wrong to draw the conclusions which they did.  There was new information before the Commissioner in the context of a diminishing of the importance of Mr Hudson’s referee comments.  Further, Mr Gibbons’ statements and the psychologist’s report were not matters which the Commissioner thought that he ought to behind.  The Commissioner found that he did not consider that the panel could not have come to the conclusion which they did or that they were biased in their approach.

30      As to the question of joint employment, the appellant asserted that Mr Brandis was jointly employed by BHPB and by IW.

31      The Commissioner held that there was no attempt by Mr Brandis and BHPB by their conduct to establish the necessary mutuality of obligation, and thus that he did not consider that a declaration of joint employment if possible was at all necessary or desirable or proven.

ISSUES AND CONCLUSIONS

Submission of Apprehended Bias

32      The Full Bench in these proceedings was constituted by Chief Commissioner Beech, Commissioner Kenner and myself as President.  I had presided over an earlier appeal to the Full Bench against the decision of the Commission at first instance, which was a decision in favour of an application by the CFMEU involving the dismissal of an engine driver employed by BHPB, namely Mr J Cupak (see Cupak’s Case (op cit)).  In that case, BHPB appealed against the decision of the Commission at first instance which found that BHPB had harshly, oppressively or unfairly dismissed Mr Cupak.

33      In that case, the Full Bench, it was submitted by Mr Schapper (of Counsel) on behalf of the CFMEU, which was the appellant in those proceedings as it is here, that Mr Cupak was unfairly dismissed, in part, because his treatment was inconsistent with the manner in which other employees of BHPB, mainly engine drivers but also a train controller, were treated in relation to breaches of the BHPB Pilbara Railway Rules.  Amongst these other drivers was Mr Brandis and his disciplining, by being suspended without pay for one tour, was submitted to be inconsistent with the treatment of Mr Cupak, by Mr Schapper.

34      This submission, of course, related to BHPB’s disciplining for misconduct in the incident of August 2002, which has been referred to above.  In that incident, Mr Brandis overrode the ATP ten times on the Yarrie Line.  That incident was clearly part of the basis for BHPB later “refusing to employ him” which is a matter the subject of this appeal.

35      At paragraph 133 in the joint reasons for decision of the Chief Commissioner and myself in the report of Cupak’s Case (op cit), we held that Mr Brandis and a Mr Yap, another driver, had been treated with “unaccountable leniency” compared to Mr Cupak.  We also held that those two employees simply did not merit the lenient treatment which they received.  These findings, it was submitted by Mr Schapper, led to the proper inference that I (and the Chief Commissioner) had decided that Mr Brandis ought to have been dismissed, or if he should not be dismissed, that his suspension for two tours was far too lenient.

36      The Full Bench found, of course, that his suspension for one tour was far too lenient.  However, Mr Schapper went on to submit that a problem arose because the CFMEU case on this appeal was that Mr Brandis should be employed on a permanent basis, whilst the implication from my reasons for decision was that I had said that he should not be employed as and from August 2002 by BHPB.  Therefore, so the submission went, what prospects were there in persuading me, not only that Mr Brandis should have not been dismissed in August 2002, or furthermore that he should now be employed on a permanent basis?  The submission went further.  It was that there was actual bias in me on the authorities.

37      Next, it was submitted that, if there was not actual bias, then there was ostensible or apprehended bias.  Thus, the appellant submitted that I should disqualify myself from hearing the appeal and allow the constitution of a Full Bench without me.

38      I have already held in Carter and Others v Drake and Others 72 WAIG 736 (FB) that the doctrine of necessity applies to the Commission where it is constituted by the President alone or sitting with other members of the Commission.

39      It was submitted that I should disqualify myself and that s17 of the Act would enable the Governor to appoint an Acting President because I would be unable to attend to my duties.  Thus, within the meaning of s17, since I would be “unable to attend to (my) duties under this Act, whether on account of illness or otherwise,” the Governor could then appoint a person to be an Acting President; and a new Full Bench could and should be constituted.

40      I am not at all persuaded that what I said in Carter and Others v Drake and Others (FB) (op cit) is wrong.  What I said there drew on the principle expressed in Laws v Australian Broadcasting Tribunal [1990] 170 CLR 70 (see also R v Cawthorne; Ex parte Public Service Association of South Australia Incorporated (1977) 17 SASR 321 (FC)).  What I said was that on a proper construction of the clear words of s17 of the Act, the President is not unable to carry out his duties within the meaning of s17 of the Act unless he is absent from the Commission or physically or mentally unable to discharge his duties under the Act.  The doctrine of necessity applies because the President cannot refuse to hear a matter while he is not on leave or whilst he is physically or mentally able to discharge his duties.  An Acting President is not a Deputy President.

41      It is improbable that the Commission requires a Deputy President and that is a matter which has been canvassed in the past, but that is not a matter germane to these reasons.

42      The Act clearly requires that the President constitute the Commission in accordance with the Act, except in those narrow circumstances prescribed by s17 to which I have referred.  The doctrine of necessity permits a member of a court who has some interest in the subject matter of the litigation to sit in a case if no judge without such an interest is available to sit. 

43      The doctrine of necessity gives “expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a tribunal and requires it to perform the statutory functions entrusted to it”, and that “must prevail over and displace the application of the rules of natural justice” (see Laws v Australian Broadcasting Tribunal (HC) (op cit) at pages 89-90).  Deane J agreed with the general statement of the rule, but at page 96, said that there were two prima facie qualifications. 

44      In any event, the rules of natural justice would only require my disqualification if a reasonable bystander would entertain a reasonable fear that I would not bring an unprejudiced mind to the appeal.  A reasonable bystander does not entertain a reasonable fear that a decision maker will bring an unfair or prejudiced mind to an enquiry merely because he/she has formed a conclusion about an issue involved in an inquiry (see R v Australian Stevedoring Industry Board and Another; Ex parte Melbourne Stevedoring Co Pty Ltd [1953] 88 CLR 100 at 116; and R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group [1969] 122 CLR 546 at 554-555; and Justice Lusink of The Family Court of Australia and Shaw; Ex parte Shaw (1980) 55 ALJR 12 at 14-15; see also Laws v Australian Broadcasting Tribunal (HC) (op cit) at pages 99-100 per Gaudron and McHugh JJ). 

45      Such a doctrine, as I have held and as was held in Laws v Australian Broadcasting Tribunal (HC) (op cit) at pages 88-89, applies to a statutory tribunal as well as a court (per Mason CJ and Brennan J).

46      When suspected prejudgment of an issue is relied upon to ground the disqualification of a decision maker, what must be firmly established is a reasonable fear that the decision maker’s mind is so prejudiced in favour of a conclusion already formed that he or she will not alter that conclusion, irrespective of the evidence or arguments presented to him or her.  I refer to the discussion of prejudgment and of ostensible bias by a Full Bench of this Commission in McCarthy v Sir Charles Gardiner Hospital (2004) 84 WAIG 1304 (FB).

47      Justice Lusink of The Family Court of Australia and Shaw; Ex parte Shaw (op cit) and R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (HC) (op cit) are examples of views expressed by judges or tribunal members not being regarded as grounds for disqualification.  In R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group (HC) (op cit), the High Court rejected the notion that a fair and unprejudiced mind was “necessarily a mind which has not given thought to the subject matter or one which, having given thought to it, has not formed any views or inclination of mind upon or with respect to it” (see R v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group(HC) (op cit) at page 554); see also Re JRL; Ex parte CJL [1986] 161 CLR 342 at 352 per Mason J as follows:-

“It needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party.  There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties.  But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way.  In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of prejudgment and this must be “firmly established”: Reg v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group(29); Watson(30); Re Lusink; Ex parte Shaw(31).  Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.”

48      In this case, it cannot be found as a fact that there is any bias, actual or ostensible, in the President because of what was decided by me in Cupak’s Case (op cit).  I so hold because:-

(a)               The parties in both cases are the same and the question of Mr Brandis’ conduct was raised for decision by the appellant in this case, who was the respondent in Cupak’s Case (op cit).

(b)               It is not reasonably inferable that I found that Mr Brandis should be dismissed.  It is clear from the reasons for decision of the Chief Commissioner and myself that we assessed his conduct as serious and found that the small penalty visited upon him was unaccountably lenient compared to that imposed upon Mr Cupak.  The Chief Commissioner and I made the same observation about Mr Yap as well.  I did not say, nor could it be reasonably inferred, that I thought that he should be dismissed, on a fair reading of the reasons.

(c)               It was not in dispute in that case that Mr Brandis had been guilty of serious misconduct on the case put by the appellant, CFMEU itself.

(d)               I was not called upon in Cupak’s Case (op cit) to reach any finding adverse to Mr Brandis’ claim to be employed or to continue to be employed, nor was the evidence available at first instance before me to reach such a conclusion which, of course, would involve consideration of a number of factors including his competence and his record as an employee, to name only two, other than the mere incident for which he was disciplined.  Thus, I reached no conclusion and it could not be inferred that I reached any conclusion or any irreversible conclusion about whether he should continue to be employed or be employed on any permanent basis or other basis by BHPB after his disciplining for the incident of August 2002.

(e)               It has not been established as a fact that I am biased, actually or ostensibly, such that my duty is to disqualify myself.

(f)                In particular, it has not been so established, for the reasons which I have expressed above, that I will approach the issues upon appeal otherwise than with an impartial and unprejudiced mind or that my previous decision in Cupak’s Case (op cit) has provided any acceptable basis for inferring that there is a reasonable apprehension that I would approach the issues with a prejudiced mind or a partial mind.

49      There was no submission that my colleagues disqualify themselves.

50      Thus, I dismissed the application that I disqualify myself from sitting to hear and determine this appeal as part of a Full Bench, primarily because the doctrine of necessity prevents me doing so, and in the alternative, because I would not be properly able to find as a fact that I was actually or ostensibly biased for the reasons which I have expressed.

Intervention by the Commonwealth Minister for Employment

51      The Commonwealth Minister for Employment sought to intervene in this appeal, even though he had not sought to do so or done so at first instance.

52      The principles relating to such interventions were considered by the Full Bench of this Commission in CFMEU v Sanwell Pty Ltd and Another (2004) 84 WAIG 727 (FB).  S30(2) of the Act enables the Minister of the Commonwealth, administering the Department of the Commonwealth which has the administration of the Commonwealth Act, to give notice to the Registrar of his intention to intervene on behalf of the Commonwealth in any proceedings before this Commission in which the Commonwealth has an interest.  The Commission can then give the Minister leave to intervene.

53      Mr Lucev (of Counsel) appeared on behalf of the Minister to make that application.  It was not in issue that the Minister was the Minister, within the meaning of s30(2) of the Act and he certainly gave notice to the Registrar in writing of his intention to intervene, as required by s30(2).

54      Counsel for the Minister sought, as required by s30(2) of the Act, to establish that the Minister should be given leave by the Commission, constituted by the Full Bench, to intervene in this appeal because these were proceedings in which the Commonwealth had an interest.

55      It was submitted that the question of the joint employment doctrine had been raised and that any such doctrine was not part of the common law of Australia or applied in a single case in Australia.  This was important, it was submitted, because, in this case, an order was sought that a State award applied to Mr Brandis’ employment in the face of the existence of an AWA and in the face of such provisions as s170VQ(4) of the WR Act.

56      The relations of State and Federal industrial instruments, it was submitted, would be affected if the joint employment doctrine were found by this Full Bench to be part of the common law of employment.  The adoption of such a doctrine, it was submitted, would have wide and important implications for Federal and State governments and employers and employees, superannuation, and questions of vicarious liability and other questions, throughout this country.

57      There was also raised the question of the operation of s170VQ(4) of the WR Act which provides that an AWA operates to the exclusion of any State award.  It was also submitted that the term “definition of employer” in the Commonwealth Act has no provision for joint employment.

58      Even, more importantly, it was submitted, a consideration of the effect of s170VQ(4) of the WR Act gave rise to a necessity to consider s109 of The Constitution when the operation of a State award in the face of an existing AWA arose, as it did in this appeal.

59      The Minister sought to intervene in a limited way relating only to grounds 1 and 2.

60      The application for leave to intervene was not opposed by the respondents but was by the appellant.

61      In my opinion, the issues referred to were likely to come up, and the implications from them could be as Mr Lucev submitted.  In particular, the interaction of State awards and AWA’s and their operation was certain to arise.  That constituted sufficient interest for the Minister to be given leave, limited to grounds 1 and 2 in this appeal.  For those reasons, I agreed with my colleagues to grant leave to the Minister to intervene, represented by Mr Lucev.

The Judiciary Act 1903 - S78B

62      The matter arising under The Constitution was correctly submitted to arise under s109 and arose because, if there was joint employment found, the operation of s170VQ(4), vis a vis State awards, fell to be considered and I have already found that that was so.

63      The question of whether notices should be given under s78B of the Judiciary Act 1903 was argued.  After the first two days hearing of the appeal, notices were given but no Attorney General, Commonwealth or State, sought to be heard in these proceedings.  In my opinion, it is quite clear that the Commission is a court of a State, when constituted by the Full Bench, for the reasons which I expressed in Helm v Hansley Holdings Pty Ltd (under Administration) (1998) 79 WAIG 23 (FB).

64      That opinion is supported by the dicta of Carr J in BGC Contracting Pty Ltd v CFMEU (2004) FCA 272.  As a result, it is necessary to say that the reasons for decision expressed in Eatts v General Manager, Aboriginal Hostels Ltd (1990) 70 WAIG 2877 and Lang v Telecom Australia (1989) 70 WAIG 186 per Fielding C do not represent the law in this Commission.

65      Thus, s78B of the Judiciary Act applies to proceedings in Full Benches of this Commission.

Fresh Evidence

66      The first respondent, BHPB, made application to the Full Bench to adduce fresh evidence, an application by which the appellant reserved the right to cross-examine Mr Keith Glenn Ritchie. The application was not opposed by the second respondent.  The evidence was admitted subject to the appellant’s right to cross examine Mr Ritchie.  The evidence sought to be adduced was contained in the affidavit of Mr Ritchie, sworn on 14 March 2005.  At the time of swearing, Mr Ritchie was BHPB’s Manager of Employee Relations.

67      His evidence was that, on or about 15 February 2005, IW ceased providing Mr Brandis’ services to BHP pursuant to its contract with BHPB and further that, as and from 8 March 2005, Mr Brandis was no longer employed by IW.  This evidence was sought to be adduced after the first two days’ hearing of the appeal in December 2004, and when the Full Bench reconvened on 15 March 2005 to complete the hearing of the appeal.  This was an attempt to adduce evidence of matters which occurred after the trial.

68      Evidence, (ie) new evidence, of matters that occurred after trial is received more readily than evidence about matters before the trial.  It is a matter of discretion and degree whether that evidence is admitted.

69      New evidence should not be admitted going to areas of uncertainty where the trial judge has already made assessments.  Conversely, further evidence may be accepted where assumptions common to the parties of the trial are falsified by subsequent events.  Similarly, further evidence is receivable where, to exclude it, would be an affront to commonsense (see Radnedge v Government Insurance Office of NSW (1987) 9 NSWLR 235 (CA), following Mulholland v Mitchell [1971] 1 All ER 307 (HL).

70      Notwithstanding the width of the discretion to receive further evidence, an appeal court reserves its decision to accept evidence to exceptional cases (see Radnedge v Government Insurance Office of NSW (op cit) at page 252 per Mahoney J; see also Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 at 296-297).

71      The evidence sought to be adduced was evidence that both the “hiring” of Mr Brandis to BHPB by IW and the alleged employment contract between IW and Mr Brandis were terminated by IW months after the alleged refusal to employ him occurred.  The evidence is merely more evidence of acts by the respondents purporting to be authorised by the contracts which they say exist and existed.  At first instance,  the Commissioner was required to determine whether there was a contract of employment between BHPB and Mr Brandis or between IW and Mr Brandis.

72      Unilateral acts by IW after the matter was determined at first instance and sought to be used by the respondents in affirmation of their cases now is not a matter going to the merit of the proceedings at first instance on this appeal.  These events do not in any way falsify or affect the correctness or otherwise of the Commissioner’s finding at first instance.  Further, the evidence is not relevant to the question of remedy.  This case was not such an exceptional case within the test expressed in Radnedge v Government Insurance Office of NSW (CA) (op cit), as to require the Full Bench to admit Mr Ritchie’s affidavit as evidence.

73      For those reasons, I agreed with my colleagues to dismiss the application to adduce that evidence.

Grounds of Appeal Do Not Comply with the Regulations

74      It was submitted on behalf of the respondents that grounds 1 and 2 do not comply with the regulation 29(2) of the Industrial Relations Commission Regulations 1985 (hereinafter referred to as “the Regulations”).  They do not in fact do that, in that they do not specify the particulars of why it is alleged the decision is wrong in law.

75      However, the matter was well advanced at the time that this submission was made.  The appellant had filed its written submissions and provided copies to the other parties.  There was never any request made for particulars before the application to strike out was made orally on 13 March 2005, nor was anything done earlier to deal with the problem.  The parties and intervener were represented by experienced and competent counsel and the outlines of submissions for the appellant, supported by the actual submissions, contained more than sufficient detail to apprise the parties and intervener of the appellant’s case, as they were required to answer it.  I might add that no disadvantage seemed to be suffered by the respondents in replying to the case for the appellant.

76      For those reasons, pursuant to regulation 92 of the Regulations, I agreed with my colleagues to exempt the appellant from compliance with the Regulations in respect of grounds 1 and 2 of the grounds of appeal.

Ground 1

77      By ground 1, it is alleged that the Commissioner erred in holding that there was not a contract of employment between Mr Brandis and BHPB.  It is alleged that there was such a contract, either jointly with the first and second respondents or, alternatively, with the first respondent.  It was not in issue that, at all material times, Mr Brandis was an employee of some person or persons and was an “employee”, as defined in part (a) of the definition of employee in s7 of the Act.

78      First, it is necessary to consider the relevant facts in some more detail as they relate to this specific ground.

79      Mr Brandis worked for BHPB for about a year in 2001 – 2002 before he entered into any written agreement with IW by way of an AWA.

80      Mr Brandis entered into a written hire agreement with IW to provide his services as an engine driver to BHPB.  He entered into no written contract of employment with BHPB and, indeed, it is not submitted that he entered into any express contract of employment with BHPB.  BHPB entered into a written agreement with IW for the supply of workers on hire, as it was alleged.  There was no written contract, nor was there any oral evidence of any contract between BHPB and Mr Brandis at any material time.

The AWA

81      There is in the appeal book a copy of an AWA (see tab 7, pages 66-74 (AB), volume 3) dated 7 October 2002.  That AWA expresses the intent that it covers the terms and conditions of employment of IW’s employees, “whilst on assignment with” BHPB.  The AWA provides in its express terms that it is to expire on the termination of IW’s contract with BHPB, “or on 31 July 2005, whichever is the sooner”.  However, it is also provided that the agreement was to continue after the date of its expiry.

82      That means that the AWA, unless otherwise terminated, was extant as at the time and date of the hearing and determination of the proceedings at first instance (see clause 2.1.2).  By an express term, upon the expiry of the AWA, the AWA continued to apply until a replacement AWA was finalised.

83      Mr Brandis also agreed that he was employed by IW on a casual basis in the AWA.  Of course, labelling employment as “casual employment” does not mean that it is casual employment if the reality is otherwise (see Serco (Australia) Pty Ltd v Moreno (1996) 76 WAIG 937 (FB)).

84      BHPB has the right under the agreement to terminate the assignment of Mr Brandis on four hours’ notice (see clause 3.2).  By the AWA, too, Mr Brandis acknowledged that he was not being offered ongoing employment and that his employment was terminable upon one hour’s notice (see clause 3.3).  He also acknowledged that he was not entitled to paid leave.

85      He also bound himself to complete the specified or minimum period of employment on assignment and, whilst on assignment, to work in accordance with his roster and associated duties (see clauses 3.5 and 3.6 respectively).  He also bound himself to perform all work required of him in a safe and proficient manner (see also clause 3.6).

86      For its part, IW bound itself to pay the employee, Mr Brandis, wages on a weekly basis, but only on receipt of a BHPB timesheet correctly completed and with the appropriate authorisation by an approved supervisor of BHPB.  IW undertook to pay wages by electronic funds transfer to a bank account nominated by Mr Brandis.

87      The “assignment” required the employee, Mr Brandis, to travel to the worksite.

88      Mr Brandis bound himself to notify IW and BHPB’s supervisor at least one hour before normal start time on any day when he was unable to attend work for any period of the assignment.  Mr Brandis also undertook to preserve the confidential nature of information which he acquired about IW and BHPB, and to return any documents to them when his assignment ended.

89      As the putative employee, Mr Brandis agreed by clause 4 (see tab 7, page 68 (AB), volume 3) to do as follows:-

“4. – Employee Undertakings

 The Employee agrees,

(a) To perform all work and associated functions in the safest possible manner.

(b) To comply with applicable legislation and the BHP Iron Ore Pilbara District Rail Road Rules and Regulations, as amended from time to time.

(c) To comply with all local site rules and requirements that are in place, and which may be introduced or varied from time to time;

(d) To adhere strictly to all Standard Operating Procedures and Safe Systems of work laid down for particular equipment or tasks and to correctly use all personal protective clothing and equipment in the appropriate circumstances.

(e) While on assignment with the Client that requires a licence, ticket or certification of any type whatsoever, (including, but without limiting the type of licence required, a valid drivers licence of any class), the Employee agrees to ensure that those licences, are current and valid during the period of the assignment.  The Employee agrees to notify a Company representative immediately if such licence, ticket or permit expires or is revoked.”

90      His actual hours of work and the nature of rosters to be worked were prescribed by BHPB.  However, IW agreed with Mr Brandis that he would not be rostered to work more than twelve hours per shift.  Mr Brandis was required to work on the job at a location nominated by BHPB (see clause 5.8).  Clause 6 prescribed the rates of pay payable by IW to Mr Brandis.  His duties were clearly prescribed to be those of a locomotive driver and associated duties (see clause 7 (tab 7, page 69 (AB), volume 3)).

91      By clause 8, IW bound itself to supply Mr Brandis as the employee with three pairs of pants, presumably trousers, three shirts, one pair of work boots, three pairs of safety glasses, one hard hat and one safety vest.  These items were replaceable on a “wear and tear” basis during the term of the assignment by IW.  Mr Brandis was required by the same clause to wear protective and personal protective equipment at all times whilst working.

92      By clause 9, IW undertook to make superannuation contributions on behalf of Mr Brandis in accordance with the Superannuation Guarantee Administration Act 1992 (Cth) and, by clause 10, to maintain statutory workers’ compensation insurance in relation to “the employment”, and also to maintain insurance in relation to employer or employee common law liability.

93      Travel to and from the airport was prescribed to be at Mr Brandis’ own cost, and travel from the site accommodation to work, was prescribed to be in his own time (see clause 11).  IW undertook to provide accommodation at any of the locations, Port Hedland, Newman, Redmont, Yandi or Yarrie, and to arrange for messing materials and the provision of meals with the exception of mid shift.

94      There were also policies which applied (see tab 7, page 74B (AB), volume 3).  For example, the drug and alcohol policy.

Agreement – BHPB and IW

95      The only other agreement in writing and an important document is the document entitled “Contract No P7825 for Provision of Locomotive Engine Drivers between BHP Iron Ore Pty Ltd and Integrated Workforce Ltd” (tab 8 (AB), volume 3)) signed on 5 and 11 June 2001 by IW and BHPB respectively (hereinafter referred to as “the contract”).  In the contract, BHPB is called “the company” and IW is “the contractor”.

96      The special conditions of the contract are important.  Clause SC1 refers to the provision of “temporary” locomotive engine drivers and the provision of professional and competent driving services as required by BHPB.  Clause SC1 reads as follows:-

 “SC-1  STATEMENT OF WORK

 The Contractor shall be responsible for the provision of temporary locomotive engine drivers (“drivers”) and the provision of professional and competent locomotive driving services as required by the Company (hereinafter “work under the Contract”).

 The Contractor shall ensure that all drivers have previously been a fully qualified locomotive engine driver on the Company’s Newman to Hedland railroad, and must hold a current A class motor vehicle license.  Drivers shall be required to satisfactorily complete theoretical and practical tests as part of the re-familiarisation with the Company’s railroad systems and facilities.

 The Contractor warrants that the drivers provided shall hold the necessary qualifications to drive locomotives of the types operated by the Company and that, without limiting General conditions clause 18.1, the Contractor shall at all times comply with the Mines Safety and Inspection Act 1994 as amended and the Mines Safety and Inspection Act Regulations 1995 as amended.”

97      The contract recites that:-

 “It is expected that drivers shall be required for variable periods through to 30th June 2001”.

98      Significantly, the contract also provides:-

 “The Company reserves the right to extend the term of the Contract, giving the contractor 30 days (sic) written notice of any such intention”  (see clause SC2).

99      There is no evidence of any written notice of any intention to extend the term of the contract.

100   IW bound itself to comply and to ensure that its “drivers and sub-contractors” complied with the safety requirements of all company sites.  IW expressly subjected all of its drivers to random drug and alcohol testing, as directed by BHPB, before commencing work on site (see clause SC5 and SC6 respectively).

101   All flights between Perth and the company sites at the commencement and completion of the roster periods of putative employees were to be arranged and provided for by BHPB, as was accommodation and messing other than the midday shift meal (see clause SC8).  There was not conferred upon IW, pursuant to the contract, the right to provide all “temporary” locomotive drivers to BHPB.  BHPB was given the discretion to “source” alternate labour (see clause SC9).

102   Importantly, by clause SC10, it is prescribed that neither the contractor nor the drivers appointed by the contractor, (ie) IW, were agents or employees of BHPB for any purpose.  BHPB agreed to pay to IW a rate per hour for drivers which were provided by IW to BHPB to work, at a rate fixed at $71.00 per hour and any additional costs (provided the Contractor had sought the Company’s prior approval and agreement).  That rate, of course, was a different rate from the rate payable by IW to Mr Brandis, which was $50.25 per hour.

103   Annexure A to the contract, the safety conditions of the contract, prescribed minimum safety requirements for the performance of work under the contract.  It required that a safety management plan be submitted by IW which was required to apply and ensure that its personnel were supplied with appropriate protective clothing, hard hats, eye protection and steel capped safety footwear.  (Clause 2.8 applies to safety equipment and clothes.)

104   Other responsibilities were cast upon IW which do not necessarily pertain to employees, for example, clauses 2.11, 2.12, 2.13 and 2.14.  The contractor, namely IW, was also required to clearly define the roles and responsibilities of all key personnel involved in the work under the contract (see clause 2.2).  There was no evidence that any of those requirements were met and, indeed, the conditions seem to be designed more for an independent contractor doing work on site by way of construction or otherwise with his own equipment than for a labour hire company.  The general conditions of the contract between BHPB and IW again seem directed to a contractor who contracts with BHPB to do work for it and uses sub-contractors or employees.

105   However, the contractor is bound pursuant to the contract to indemnify and keep indemnified BHPB against loss or damage to BHPB’s property.  Significantly, this does not include locomotives or rolling stock or claims by any person in respect of personal injury (see clause 21).

106   By virtue of clause 22, workers’ compensation insurance and employer’s liability insurance are the responsibility of IW.

107   IW is required to employ only persons who are careful, skilled and experienced in their trades or callings (see clause 25).  Clause 25 also confers on BHPB the right to direct IW to have removed from the site any sub-contractor or employee employed in connection with the work under the contract if, in BHPB’s representatives’ opinion, he is negligent, guilty of misconduct or whose involvement the company’s representative considers not to be in the best interests of the project.

108   The relevant part of that clause reads as follows:-

 “25.   CONTROL OF CONTRACTOR’S EMPLOYEES, SUBCONTRACTORS AND SUBCONTRACTORS’ EMPLOYEES

 The Contractor shall employ, and ensure that its subcontractors employ, for the work under the Contract, only such persons who are careful, skilled, experienced, and competent in their respective trades and callings.

 The Company’s Representative may direct the Contractor to have removed from the Site, or from any activity connected with the work under the Contract, within such time as the Company’s Representative directs, any subcontractor or person employed in connection with the work under the Contract who, in the Company’s Representative’s opinion, is incompetent, negligent, guilty of misconduct or whose involvement the Company’s Representative considers not to be in the best interest of the project. (my emphasis)  At no cost or expense to the Company, the Contractor shall immediately comply with the direction of the Company’s Representative and the Contractor shall not re-employ or permit any such person so dismissed to be re-employed in or in connection with the performance of the work under the Contract without the prior approval of the Company’s Representative.”

109   The contractor, (ie) IW, is given responsibility for industrial relations with the contractor’s, that is, IW’s personnel (see clause 26.6(a)).  However, very significantly, clauses 26.6(b), (c), (d), (e), (f) and (g) read as follows:-

 (b) Right to Advise

  The Company reserves the right to advise on industrial and personnel policies that concern the Contractor in the performance of the work under the Contract and the Contractor shall comply with the Company’s Representative’s industrial relations directions.

 (c) Industrial Agreement

  The Contractor shall not enter into any industrial agreement with respect to the Site with any union without the prior approval of the Company’s Representative.

 (d) Meetings

  The Contractor shall attend meetings at the Site called by the Company’s Representative for the purpose of discussing industrial matters.

 (e) Industrial Disputes

  The Contractor shall keep the Company’s Representative fully informed of any dispute with any of the Contractor’s personnel, any trade unions, or any demands for wages and/or conditions in excess of or outside the scope of current industrial agreements and awards affecting the Site.

 (f) Demarcation Problems

  The Company’s Representative shall be immediately informed of demarcation problems or disputes that may arise between the Contractor’s personnel and the personnel of any other company represented on Site.

 (g) Termination of subcontract

  If industrial relations difficulties concerning any subcontract develop and are deemed by the Company’s Representative to be detrimental to the progress of the work under the Contract, the Contractor shall at the request of the Company’s Representative immediately terminate that subcontract without any cost to the Company and make other arrangements to perform its obligations under this Agreement.”

110   What those sub-clauses do is to place industrial relations on the site and in relation to employees of contractors and, in this case, IW, clearly in the hands of BHPB.  IW has to comply with BHPB’s industrial relations directions.  Further, it cannot enter into any industrial agreement by virtue of that provision, without the prior approval of BHPB and, presumably, cannot terminate it without that permission.

111   Moreover, IW must advise BHPB of all disputes with IW’s own personnel which includes employees or unions and/or demands for wages and conditions in excess of or outside the scope of current industrial agreements and awards.  IW is also required by the contract to inform BHPB immediately of demarcation problems or disputes which may arise between IW’s personnel and any other company’s personnel represented on site.

112   The contract also conferred possession of the site or use and control of the site, sufficient to enable the contractor to execute the work which the contractor contracted to do, upon the contract (Clause 27).  But, of course, there was no such requirement practicably upon IW in relation to Mr Brandis who drove a locomotive.

113   By clause 28.1, it was provided that work was to commence as determined by BHPB’s representative but no completion date is or was prescribed.  There are a lot of clauses relating to effective workmanship and warranties about the standard of workmanship and materials and the like which have simply no relevance to an alleged contract to supply the labour of an employee (see clause 30).

114   Again, there is provision for payment, but it is a provision for payment of IW by BHPB.  However, it applies to work carried out by the contractor.  Clause 37 makes provision for the payment of a contractor’s employee.  Clause 37 reads as follows:-

 “37. PAYMENT OF SUBCONTRACTORS AND WORKERS

 The Company’s Representative may require the Contractor to provide, as a condition precedent to the Company making any payment to the Contractor, a statutory declaration, or sufficient evidence, that:

(a)   all workers who have at any time been engaged on work under the Contract, whether by the Contractor or a subcontractor, have been paid all moneys payable to them in connection with their employment on the work under the Contract;

(b)   all subcontractors have been paid all moneys payable to them in respect of the work under the Contract.

At the request of the Contractor and out of moneys payable to the Contractor, the company may on behalf of the Contractor make payments directly to a worker or subcontractor.

Upon termination for default, insolvency or for convenience, in the event that the Company has no reasonable alternative for industrial relations or commercial reasons than to make payment to workers, or to subcontractors who have been engaged at any time on the work under the Contract (which amounts were included in a progress payment to the Contractor but which have not been paid to those persons by the Contractor), then the Company may make the payments and may set-off or otherwise recover from the Contractor the amounts so paid.”

115   Clause 40.2 refers to the defaults by the contractor, in this case IW.  The definition refers to “work under the Contract” which means all of the work which the contractor is or may be required to do.  Again, the wording was a little unrelated to a purported labour hire contract.

116   Clause 25 was drawn to the attention of the Full Bench as significant.

117   I have considered the above documents in some detail in these reasons because of the reliance to a greater or lesser extent by the parties on them.

Australian Workplace Agreements – Their Operation and Effect

118   For the time that he worked for BHPB after October 2002, whether he was actually employed by that company some of the time or not, Mr Brandis was a party to the AWA with IW to which I have referred above.  It was a major submission on behalf of the respondents that the AWA constituted a contract of employment which prevented the appellant asserting or the Full Bench finding that there was any contract of employment between Mr Brandis and BHPB during the term of operation of the AWA.

119   It is the law that an AWA operates during its term to the exclusion of any State award which includes an order or industrial agreement (s170VQ(4) of the WR Act).  It does not expunge the State award or prevent one issuing (see the Full Bench’s discussion of this in Hanssen Pty Ltd v CFMEU (2004) 84 WAIG 694 (FB)).

120   I now examine the nature of an AWA.  It is a written agreement which “deals with matters pertaining to the relationship between an employer and an employee” (see s170VF(1) of the WR Act), and it may be made before the commencement of the employment.  It is also to be noted that s170VQ(4) expressly recognises in prescribing that an AWA operates to the exclusion of any State award or agreement, that this is so.  The words used are important and exclude the operation of any State award or agreement “that would otherwise apply to the employee’s employment”.  Giving those words their natural and plain meaning, an AWA does not expunge, invalidate, or exclude from operation the contract of employment.  Further, there is nothing in the WR Act which prescribes that.

121   I apply the same reasoning as was applied to awards in Byrne and Frew v Australian Airlines Ltd [1995] 185 CLR 410.  Thus, the existence of the AWA could not and does not purport to prevent the contract of employment, (ie) the employment relationship, coming to an end by mutual agreement, by repudiation, by dismissal or by any other lawful means.

122   The AWA exists and regulates those terms and conditions of employment which it purports to do because there is, or will be, an employment relationship between the parties to the AWA.  When the employment relationship ends, the AWA can have no effect because, by the words of the statute which prevents the operation of the State award or agreement, etc, there is no employment relationship to which it applies and the AWA has effect only because there is such a relationship.  Thus, it does not require a formal act of termination of the AWA because the AWA only exists because there is an employment relationship usually itself arising because there is an employment contract.

123   No question of the operation of s109 of The Constitution of the Commonwealth of Australia arises for the reasons expressed in Hanssen Pty Ltd v CFMEU (FB) (op cit).  Alternatively, even if that was wrong, there is nothing to prevent the application of a State award or agreement when the AWA ceased to operate (see Hanssen Pty Ltd v CFMEU (FB) (op cit)).  In this case, if the contract of employment between IW and Mr Brandis terminated at a material time, then the AWA could not continue to operate as and from the time when the contract of employment terminated.

124   Importantly, however, one can turn to the question of who the parties to any contract of employment were without the existence of the AWA muddying the waters.

Contract of Employment

125   It was not in dispute that Mr Brandis was, at all material times, an employee.  Unlike a number of reported labour hire cases, the question was not whether he was an independent contractor.  The question was whether he was an employee of IW or of BHPB at the material times.

Was there a contract of employment between BHPB and Mr Brandis? – Relevant Facts and Matters

126   There were a number of facts or matters which are relevant to the determination of this question.  They are these:-

(a)               Mr Brandis entered into an AWA on 7 October 2002 with IW which purports to characterise him as an employee whilst on “assignment” with BHP Iron Ore Pty Ltd and due to expire on 31 July 2005 or when IW’s contract with BHPB expired, whichever was the sooner.  (It is to be noted that, when the assignment ended, he was no longer an employee of IW.)

(b)               Mr Brandis was described as a casual employee in the AWA but, in fact, he worked on rosters prepared by BHPB and according to those requirements, on a continuing basis for about three years and was continuing to so work as at the date of the hearing at first instance on 25 August 2004, concluding on 8 September 2004.

(c)               His employment was described as casual, but BHPB could terminate his assignment on four hours’ notice and his employment, which was said to be not ongoing permanent employment, was terminable by only one hour’s notice (see clause 3.0).

(d)               By the AWA, Mr Brandis acknowledged that, as a “casual employee”, he was not entitled to any paid leave.  It follows that, if he was not a casual employee, he was so entitled.

(e)               If he elected not to complete the assignment, he was required to complete the minimum period of the assignment and to inform IW immediately of this fact.

(f)                It was IW’s duty to pay him for the work done on assignment, that is his wages, on a weekly basis by electronic funds transfer into his bank account.

(g)               He was required to notify IW if he was unable to travel to the work site.

(h)               He agreed to keep confidential, information which he obtained from IW and from BHPB and to return confidential material to them.

(i)                 IW undertook that employees would not be rostered on assignment for more than 12 hours per day, subject to exceptions.

(j)                 However, when and where they worked was a matter to be prescribed by BHPB by the rosters which Mr Brandis was required to work.

(k)               The hourly rate payable was $50.25 gross per hour, with a casual loading said to be included in it, payable by IW and not by BHPB, although BHPB reserved to itself the right to pay direct.

(l)                 A different rate per hour of $71.00 was payable by BHPB to IW.

(m)            BHPB agreed to and did pay accommodation at various locations in the Pilbara and organised Mr Brandis’ travel and paid for it to and from Perth to the Pilbara, as well as his messing.

(n)               A resolution of disputes clause, whereby the parties undertook to accept as final and binding the decision of the Australian Industrial Relations Commission was contained in the IW agreement (clause 14) and a dispute mechanism in relation to matters of discrimination also appears.

(o)               There is no other relevant written or express oral agreement between IW and Mr Brandis or BHPB and Mr Brandis.

(p)               The contract between BHPB and IW is ambiguous in that it contains clauses which relate to a contractor doing work, particularly work of a construction or excavatory type, rather than to the provision of a “temporary” locomotive driver and his labour.

(q)               IW undertook to provide competent and qualified locomotive drivers.   (Nonetheless BHPB, as a matter of fact, inducted them and tested them for competence (see clause SC1) and has the right to refuse to use them.)

(r)                In its last paragraph, clause SC1 clearly provides that IW warrants that it would comply with the Mines Safety and Inspection Act 1994 (as amended) and the Mines Safety and Inspection Act Regulations 1995 (as amended).  How it could possibly achieve that, when it was not supervising Mr Brandis on site, is another matter.

(s)                (i) The BHPB/IW agreement clearly provides that IW’s duty is to provide “temporary” drivers when required for variable periods until 30 June 2001, the agreement being dated 11 June 2001.  The agreement is for a very short period and there is no evidence that that agreement was extended.

 (ii) I say that because BHPB reserves the right to extend the term of the contract, “giving the Contractor 30 days (sic) written notice of any such intention”.  There is no evidence of any such written notice or any such notice being given and, therefore, there is no evidence that the contract was at all extended.

(t)                 That assignments were only short term is borne out by the reference to the requirement for variable periods through until 30 June 2001 which is 19 days after the contract between BHPB and IW was signed.

(u)               The words “temporary employee” has been judicially defined to some extent in Williams v Macharg [1908] 7 CLR 213, although there are many statutory definitions.  It seems to me that employment is not a temporary and finite assignment under the agreement between IW and BHPB, if  Mr Brandis were engaged in regular and continuous work and not temporary assignment and if his position became a position not created to meet a temporary emergency and not merely casual and one which was necessary to the ordinary working of locomotives by the respondents which was palpably the case in this matter.

(v)               That he was also deemed to be a casual employee, rightly or wrongly, supports such a conclusion, namely that he was not, after he ceased to be a casual employee, if he ceased to be a casual employee, engaged pursuant to any contract between IW and BHPB.

(w)             Whilst IW was required to ensure that all of its workers performing work under the contract completed the necessary site and area inductions as directed by BHPB before commencing work on site, there was still a necessary induction by BHPB.  Indeed, it is doubtful that IW could arrange for inductions because, firstly, it was not its site, and secondly, there was no expertise in IW in the running of railways or the supervision of locomotive drivers.

(x)               It was not in dispute that IW knew nothing about running railways and supervising training or assessing the work ability of locomotive drivers (clause SC5).

(y)               IW was required to have the drivers comply with BHPB’s safety requirements at all company sites and to immediately notify BHPB of any death or injury to any person or any loss or damage to company property.  Again, there was no evidence that this burden was carried out.  It was unlikely that IW, which did not have the knowledge to supervise locomotive engine drivers, could possibly have drivers comply with BHPB’s safety requirements.

(z)               IW acknowledged that “all of its drivers” performing work under the contract on site were subject to random drug and alcohol testing as directed by BHPB.

(aa)           IW was also required to ensure that all of its drivers performing work under the contract completed all necessary inductions as directed by BHPB (see clause SC7).

(bb)           BHPB agreed to provide all flights necessary to transport drivers between Perth and the company sites at the commencement of and the completion of rostered periods which is what occurred in fact, and I have already noted that accommodation and messing were provided by BHPB too (see clause SC8).

(cc)           BHPB also undertook to provide all safety clothing and equipment in accordance with site requirements.

(dd)           Significantly, the agreement expressly provided that neither IW nor its drivers would be agents or employees, for any purpose, of BHPB (see clause SC10).

(ee)           IW agreed to provide drivers to BHPB and BHPB agreed to pay a rate of $71.00 per hour, exclusive of GST, to IW, for the labour of each such driver.

(ff)             BHPB required under its safety conditions of the contract that there be nil accidents, nil incidents, nil injuries, nil property damage, and that the conditions be read in conjunction with the Mines Safety and Inspection Act 1994 (as amended) and the Mines Safety and Inspection Act Regulations 1995 (as amended), “all other applicable legislation, statutory regulations and standards and all further Company safety requirements”.  These, of course, included the BHP Pilbara Railway Rules referred to by the Full Bench in other appeals, and which are comprehensive rules for the conduct of railways including the performance of locomotive drivers.

(gg)           The general conditions of contract services in the BHPB/IW agreement, many of which are inapplicable for the reasons which I have expressed above, however, do contain some relevant provisions.

(hh)           An example of why much of this agreement is inapplicable is the definition of “work under the contract”, which defines “all of the work which the Contractor is or may be required to execute under the Contract and includes the work more particularly described in the specification and variations and remedial work”.  As I observe, those terms deal with a contractor who is actually performing work such as construction or excavation at the BHPB mine sites.

(ii)              IW indemnifies BHPB against loss or damage to property, but significantly, not to locomotives or laden or unladen rolling stock (my emphasis), and other claims arising out of or in connection with IW, its agents, employees or subcontractors carrying out the work under the contract (clause 21).  In other words, the putative employee’s acts of damage, if any, to BHPB locomotives or rolling stock do not result in vicarious liability for IW.

(jj)              IW binds itself by the contract to maintain its own insurance to cover IW’s employees in respect of death or injury, both by way of workers’ compensation insurance and common law liability.  Significantly, the suitable policies maintained must be approved in writing by BHPB (clause 22).  Again, IW cannot enter into an insurance policy or policies of its own selection.

(kk)           IW is required to employ and ensure that its subcontractors employed to perform the work under the contract are only such persons who are careful, skilled, experienced and competent in their respective trades and callings (clause 25).  However, BHPB has a right to choose who works as a locomotive driver and does so.  IW cannot and could not judge the real competence of a locomotive driver.

(ll)              Importantly, BHPB’s representative has the right and discretion to direct IW to have a worker removed from the site or from any activity connected with the work under the contract within such time as BHPB’s representative directs that this occur.  That is, even if the worker is IW’s employee, BHPB can make a judgment about the employee, the standard of his work and terminate his work for BHPB with no notice to or without the consent of IW.

(mm)      IW is required to comply with BHPB’s site management requirements, procedures and directions and those prevailed over its own (clause 26.3), as well as BHPB’s safety directions in the same manner (clause 26.5).  That means of course that the workers who come to the site through IW are entirely subject to BHPB’s direction in safety and other matters because, as a matter of fact, IW does not, did not and cannot direct locomotive drivers.

(nn)           Clause 26.6, which deals with the subject of industrial relations is, as I have expressed it above, a very important clause.  By that clause, IW bound itself to be responsible for industrial relations with IW’s “personnel”.  However, that is diluted to almost nothing by the same clause by which BHPB expressly reserved to itself the right to advise on industrial and personnel policies that concern IW in the performance of work under the contract and IW is mandatorily required “to comply with the BHPB’s representative’s industrial relations directions”. 

Thus, all matters of an industrial relations nature which would include terms and conditions of employment, management, dismissals, what industrial instruments IW could enter into or terminate, and a large number of other such matters, are matters which are finally determinable by BHPB.

In particular, IW is expressly prohibited by the clause from entering into any industrial agreement “with respect to the site” with any union without the prior approval of BHPB’s representative.

It is compulsory, too, that IW attend meetings at the site called by BHPB’s representatives for the purpose of discussing industrial matters.  Again, also IW is compulsorily required to keep BHPB’s representative fully informed of any dispute with any of IW’s personnel, any trade unions or any demands for wages and/or conditions in excess of or outside the scope of current industrial agreements and awards affecting the site.

Further, IW binds itself to inform BHPB’s representatives if any demarcation problems or dispute may arise between IW’s personnel and the personnel of any company represented on site.  The ultimate arbiter of terms and conditions of employment or variation of terms and conditions of employment of IW’s “employees” is unquestionably BHPB.

Thus, the terms and conditions of employment and all of the control of employees in all industrial relations matters, including relations with IW’s employees and unions are ultimately and finally in the hands of BHPB and not IW.

(oo)           The time for commencement and completion of the contract are merely as determined by BHPB’s representative with no express completion date.  However, one looks to the AWA to see that.

(pp)           Whilst IW is required to pay all workers engaged to work, whether employees, subcontractors or subcontractors’ employees, and provide proof that it has done so, if required, BHPB may, if requested by IW, make direct payments to a worker.  Again, BHPB can, with little trouble, become the actual payer of the employees and take that obligation upon itself.

(qq)           Mr Brandis was not employed temporarily or casually but was employed on a continuing and ongoing basis as an engine driver at or by BHPB on its “premises” from 7 October 2002 until the date of hearing and he remains so employed.

(rr)             During that time, he was not dismissed or suspended, nor was his employment terminated, nor did either IW or BHPB purport to terminate his employment.  He was employed there as a locomotive driver as at 2004, having commenced work in or about June 2001 and continued to be employed at the time of the hearing of the proceedings at first instance.  Notably, he was employed for some fifteen months before he signed the AWA.  It is not at all clear on what basis he was employed at that time.

(ss)            At all material times, Mr Brandis was directed, controlled and rostered whilst working as a locomotive driver, albeit an experienced one.  He worked where and when he was told to by BHPB.

(tt)              There was no contract being physically and actually carried out on site by IW.

(uu)           Mr Brandis complied with all safety regulations and all of the relevant regulations and this was a matter within the actual control of BHPB.

(vv)           He was required to comply with directions being given by BHPB, for example, a minor direction was that he check the filing cabinet every day before commencing work to see what directions might be there in writing from BHPB so that he would be apprised of them.

(ww)       There was no day to day control of him exercised by IW, nor since there was no evidence that IW was anything but a labour hire company, was IW capable of exercising any such control or giving him any such direction as to how to drive a locomotive, safe practices and the levels of competence and safety required at any time.  There was no evidence that IW had the ultimate right to control him after the assignment terminated.

(xx)           His direction and supervision from day to day, on all of the evidence, was by BHPB and carried out in the same manner as was the direction and control of persons actually designated as BHPB employees.  It is difficult to see how that could not be, given what the work of a locomotive driver is.

(yy)           At all material times, IW paid Mr Brandis’ wages, and at all material times, BHPB paid the amount it was required to pay under the original contract.

(zz)           At all material times, IW maintained insurance relating to workers’ compensation and common law employer’s liability and made superannuation contributions in respect of Mr Brandis in accordance with its contractual obligations.

(aaa)        In August 2002, when Mr Brandis was charged by his employer with a breach of the safe working rules, which he admitted, the investigation was entirely conducted by BHPB and the decision about the discipline to be imposed on him was imposed in accordance with BHPB’s rules.  Having decided the penalty, BHPB seems to have really adopted the approach of asking IW to confirm it to him.

(bbb)      There is no evidence about who had the right to dismiss Mr Brandis under the contract, but it would be implicit in the contract, if there was a contract of employment with BHPB, that BHPB would have the right to terminate it, as Mr Brandis would have the right to terminate it.

(ccc)        Mr Brandis did apply for a permanent position as an engine driver with BHPB and applied as if he were not an employee. 

(ddd)      When BHPB directly tried to force Mr Brandis to take a reduction in pay, he objected to it and had discussions with both IW and BHPB about it before, no agreement having been reached, he referred it to the employment advocate who resolved it.

(eee)        At all material times, BHPB had a statutory duty to ensure that employees carried out their duties in accordance with all of the relevant statutory and regulatory rules about safety and the working of locomotives.  Further, they had this duty in relation to independent contractors.

127   At all material times. BHPB had the right to control Mr Brandis’ work and all related matters.  It exercised actual or relevant control, and there was no evidence that he was not integrated into the workforce, at least for all practical purposes, and into the BHPB railway organisation.  That is because:-

(a)               Supervision was and could only be provided by BHPB and no-one else when he was at work and on the track.

(b)               His role and the performance of his functions was to all intents and purposes no different from an employee.

(c)               His roster was drawn up and maintained by BHPB which therefore determined when he started and finished work and what work he would do and where he would do it.

(d)               BHPB directed him, and directs him, to take breaks and when he is to bring his crib to work.

(e)               BHPB directs him how to drive the train in order to conserve fuel.

(f)                BHPB directs him where to reside when on tour and provides accommodation and mess facilities.

(g)               On signing on for work, he is required to check the filing cabinet for memos from BHPB.

(h)               There is no significant difference between IW drivers and BHPB drivers.

(i)                 He was invited to meetings along with all other drivers, as if he were an employee.

(j)                 He was, at one time, required to wear BHPB clothing with the BHPB logo on it.

(k)               He was invited to participate with BHPB employees in the BHPB Healthy Lifestyle Program.

(l)                 He was engaged on a long term basis, indeed an indefinite basis as part of the BHPB railway organisation from June 2001 for three years and continuing as at the time of the hearing.

(m)            BHPB arranged and bore the expense of travel to and from Perth to the Pilbara and BHPB, at all material times, provided all safety gear, not IW, notwithstanding the terms of the IW contract with Mr Brandis.

(n)               BHPB provided all necessary training and supervision and disciplined Mr Brandis and did so without requiring the consent of IW.

An Implied Contract

128   I would make these observations preliminary to a consideration of this ground.

129   The principles for consideration of the issues raised by this ground are well settled by Hollis v Vabu Pty Ltd [2001] 207 CLR 21 and Stevens and Gray v Brodribb Sawmilling Co Pty Ltd [1985-1986] 160 CLR 16, as well as the other authorities  which I have cited.  In particular, considering what is a contract of service  or whether there is a contract of service between parties in any particular circumstances, the jurisprudential ground has been ploughed, scarified and harrowed so thoroughly as to require little further attention from me.

130   I respectfully apply what Lord Loreburn LC said in McCartan v Belfast Harbour Commissioners [1911] 2 Irish Reports 143 at 145:-

“Decisions are valuable for the purpose of ascertaining a rule of law. No doubt they are also useful as enabling us to see how eminent Judges regard facts and deal with them, and great numbers of recorded precedents are useful in no other way. But it is an endless and unprofitable task to compare the details of one case with the details of another, in order to establish that the conclusion from the evidence in the one must be adopted in the other also. Given the rule of law, the facts of each case must be independently considered, in order to see whether they bring it within the rule or not.”

131   The first question to be determined is whether there was in existence, at the material times, a contract of employment between BHPB and Mr Brandis.  It was argued strongly on behalf of the CFMEU that there was, at all material times, a contract of employment between Mr Brandis and BHPB, a submission just as strongly opposed by counsel for both of the respondents.

132   There is no doubt that a contract of employment can arise by implication, just as any other contract can between parties.  Indeed, it is one which suggests that, given that contracts are quite often not reduced to writing or evidenced by writing, or are the subject of inexact oral evidence, likely to be the case (see, for example, Matthews v Cool or Cosy Pty Ltd (2003) 84 WAIG 199 at 218-220 (FB) and see in that case the discussion of implied contracts).  In determining disputes concerning the existence of employment arrangements, the proof of “paper documentation” is relevant, but not determinative (see Pitcher v Langford (1991) 23 NSWLR 142 (CA); see also Matthews v Cool or Cosy Pty Ltd (FB) (op cit) at page 218).

133   Importantly, the facts may ground an inference of an implied contract of service, even though the parties thereto may not be conscious of what they have done, so that the law will spell out a contract from their dealings (see Matthews v Cool or Cosy Pty Ltd (FB) (op cit) at page 218 and Swift Placements Pty Ltd v Workcover Authority of NSW (Inspector May) (2000) 96 IR 69 at 84-88 (IRC NSW in Court Session).  Whether a contract of employment can be implied depends on a whole number of circumstances and the totality of them.

134   In some circumstances, it will not be possible to identify any particular act by one party which constitutes an offer, or by the other which amounts to an act of acceptance.  Yet, if the parties have conducted themselves on the basis that a contract exists between them, a court would readily infer that such a contract has been brought into being.  There is no need in such cases to have recourse to analysis in terms of offer and acceptance.  What is important is usually to decide not whether the contract has come into existence but rather to determine when that occurred (see Greig and Davis “The Law of Contract” at page 249; and The Farmers’ Mercantile Union and Chaff Mills Limited v Coade and Another [1921] 30 CLR 113).

135   The court, or in this case the Commission, is entitled to consider the reality of the purported contractual arrangements and may do so, even though it was not argued that the agreement was a sham (see Dalgety Farmers Ltd t/a Grazcos v Bruce and Another (1995) 12 NSWCCR 36).

136   In implied contracts, agreement is not a mental state but an act, and an inference from conduct (see Chitty on Contract, 29th Edition (paragraph 8)).

137   Implicit in the submission of Mr Schapper for the appellant, although he did not expressly raise the question, was that, at some stage, the contract between IW and Mr Brandis was terminated by tacit agreement or abandonment.  It is clear that, informally but effectively, parties can act in relation to each other so as to abandon or abrogate a contract (see Summers and Another v The Commonwealth [1918] 25 CLR 144 and Mathews v Mathews [1941] SASR 250 at 255 per Napier JJ (as he then was)).

138   The question, in this class of case, was whether the conduct of the parties, BHPB and Mr Brandis, viewed in the light of the surrounding circumstances, showed a tacit understanding or agreement.  The conduct of the understanding or agreement between BHPB and Mr Brandis is important in that regard (see Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 (CA) per Heydon J at page 177, quoting what McHugh JA, Hope and Mahoney JA concurring, said in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118:-

“It is often difficult to fit a commercial arrangement into the common lawyers’ analysis of a contractual arrangement.  Commercial discussions are often too unrefined to fit easily into the slots of ‘offer’, ‘acceptance’, ‘consideration’ and ‘intention to create a legal relationship’ which are the benchmarks of the contract of classical theory.  In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship….

 Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled.  Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties’ subsequent conduct become sufficiently specific to give rise to legal rights and duties.  In a dynamic commercial relationship new terms will be added or will supersede older terms.  It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.”

139   Whether limited or not, recognition has been given to an ability to find contracts implied, even though it is not easy to find an offer or acceptance.

140   However, as Marshall J said in Damevski v Guidice, President of the Australian Industrial Relations Commission and Others 202 ALR 494 (FCFC), contracts are not to be implied lightly.

141   The conduct of the parties must show all the essential elements of the contract, an intention to enter into legal relations by the parties, mutual obligation or consideration, and an offer by one party and acceptance by the other.  Further, the test of an intention to effect legal relations is an objective one (see per Wilcox J and Marshall J in Damevski v Guidice (op cit) at page 510).  The labels used of course are not necessarily determinative of the nature of the relationship or whether there is a legal relationship by way of contract of service.

142   It may be that the promisor never anticipated that the promise would give rise to any legal obligations but, if a reasonable person would consider that there was an intention to contract, then the promisor will be bound (see Damevski v Guidice (op cit)).  At page 511, Marshall J said:-

“it is in my opinion of more assistance to ask whether actual or subjective intention to contract plays a part in determining whether there is a binding contract, and (if it does) what part it plays.  The proper view is, in my opinion, that the existence of a contract is a consequence which the law imposes upon, or sees as a result of, what the parties have said and done.  Actual subjective intention to contract is a factor which the law takes into account in determining whether a contract exists but it is not, or not always, the determining factor.”

143   In determining whether a contract of service has been entered into and, if so, with whom, the commission or a court will look at the whole of the circumstances of the engagement, ascertain who was offering employment and whether the employee accepted the offer.  The right of control is significant but not the sole determinant of what then ensued, a careful look at the whole of the relationship being essential.

144   The court may imply a contract by concluding that the parties intended to create contractual relations after examining extrinsic evidence including what the parties said and did.  The court or commission looks at the totality of the relationship (see Dalgety Farmers Ltd t/a Grazcos v Bruce and Another (op cit) at pages 46-48; and see also Matthews v Cool or Cosy Pty Ltd (FB) (op cit) at page 218).

145   I agree that, in general, the courts have held that the imposition of a labour hiring agency between its “clients” and the workers it hires out to them does not result in an employer/employee relationship between the client and the worker (see the discussions of these matters in Brook Street Bureau (UK) Ltd v Dacas (2004) EWCA Civ 217 (CA) and Forstaff Pty Ltd and Others v Chief Commissioner of State Revenue [2004] NSWSC 573 which are cases dealing with such a question).

146   It is quite clear that, in the beginning, there was in this case a written agreement between Mr Brandis and IW on the one hand to employ Mr Brandis and an express written agreement between IW and BHPB whereby IW contracted to provide locomotive drivers to work for BHPB on a temporary basis under a contract which was due to expire, unless extended, on 30 June 2002.

147   I put aside for the present the determination of the question whether BHPB and IW were, pursuant to those contracts and/or later, joint employers of Mr Brandis.  I will deal with that question later in these reasons.

148   In determining whether there is a contract of employment or was a contract of employment at the material time for the purposes of the proceedings at first instance between BHPB and Mr Brandis, I apply the principles laid down in Hollis v Vabu Pty Ltd (HC) (op cit) and Stevens and Gray v Brodribb Sawmilling Co Pty Ltd (HC) (op cit) at 29 (see also Matthews v Cool or Cosy Pty Ltd (FB) (op cit) where Stevens and Gray v Brodribb Sawmilling Co Pty Ltd (HC) (op cit) and Hollis v Vabu Pty Ltd (HC) (op cit) are cited and applied at page 218).

149   These authorities were followed by the Full Benches of this Commission in United Construction Pty Ltd v Birighitti (2002) 82 WAIG 2409 (FB) and Augustyn v Vistadale Pty Ltd as trustee for the Ranger Family Trust t/a Ranger Contracting (2002) 82 WAIG 939 (FB) and by the Industrial Appeal Court in Tricord Personnel v CFMEU (2004) 85 WAIG 5 (IAC) and United Construction Pty Ltd v Birighitti (2003) 83 WAIG 434 (IAC) (see also Matthews v Cool or Cosy Pty Ltd (FB) (op cit)).

150   In Hollis v Vabu Pty Ltd (op cit) at page 41 per Gleeson CJ, Gaudron, Gummow, Kirby and McHugh JJ quoted with approval what Mason J said in Stevens and Gray v Brodribb Sawmilling Co Pty Ltd (op cit) at pages 28-29.  I quote the whole of the passage from the judgment of Mason J at pages 28-29:-

“The traditional formulation, though attended with some complications in its application to a diverse range of factual circumstances (Federal Commissioner of Taxation v Barrett), nevertheless has had a long history of judicial acceptance. True it is that criticisms have been made of it. It is said that a test which places emphasis on control is more suited to the social conditions of earlier times in which a person engaging another to perform work could and did exercise closer and more direct supervision than is possible today. And it is said that in modern post-industrial society, technological developments have meant that a person so engaged often exercises a degree of skill and expertise inconsistent with the retention of effective control by the person who engages him. All this may be readily acknowledged, but the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, “so far as there is scope for it”, even if it be “only in incidental or collateral matters”: Zuijs v Wirth Bros. Pty. Ltd.. Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered.

The finding that both Gray and Stevens were independent contractors disposes not only of the argument that Brodribb is vicariously liable for Gray's negligence by virtue of a relationship of employment, but also of the argument that Brodribb is personally liable to Stevens for breach of the duty of care owed by an employer to an employee.”

151   Their Honours referred to Zuijs v Wirth Bros Pty Ltd [1955] 93 CLR 561 at 571.  Furthermore, control is not now regarded as the only relevant factor.  “Rather it is the totality of the relationship between the parties which must be considered”.  Their Honours then said:-

“So it is that, in the present case, guidance for the outcome is provided by various matters which are expressive of the fundamental concerns underlying the doctrine of vicarious liability.  These include, but are not confined to, what now is considered “control”.”

152   In other words, one looks at the totality of the relationship between the parties to determine whether there was a contract which was a “contract of employment”.  As I have already observed, the question of whether Mr Brandis was an independent contractor did not arise at any time.

The Abandonment or Tacit Agreement to Terminate any IW/Brandis Contract of Employment

153   It is necessary to consider whether, even if there was a contract of employment with IW by Mr Brandis, such a contract ended and was replaced with a contract of employment between Mr Brandis and BHPB, at any time.

154   If one looks at the actual intention of Mr Brandis and BHPB as expressed in the contracts and the intention of IW similarly expressed, it is quite clear that after the expiry of the IW/BHPB agreement, he continued employment with BHPB.  There was no written agreement binding him with IW or with BHPB.

155   The employment was not subject to any written agreement, in fact, until Mr Brandis signed the AWA.  At no time before or after he signed it was he a “temporary employee” in accordance with the agreement.  He became a permanent or continuing employee in that he was employed for over three years on a regular basis on a weekly roster, as was the evidence at first instance, and as a locomotive driver for BHPB remaining so employed as at the time the matter was heard at first instance, which was in August/September 2004.

156   The hire agreement, as alleged, in written form did not apply to him therefore because he was not a temporary employee or on brief finite assignment up until 30 June 2001, or at all.  He was not either within the meaning of the authorities a casual employee and that is because he became an employee who was long term and indefinitely and continuously employed, not employed on finite discrete assignments, which was the case by way of clear distinction in Forstaff Pty Ltd and Others v Chief Commissioner of State Revenue (op cit).  Further, the Forstaff case is distinguishable because the employees in that matter, it was never alleged, were anything but temporary in accordance with the written contract.

157   That Mr Brandis was so employed, if it were necessary to say so, is further borne out by the fact that when he took himself off a tour at Christmas time 2003 after giving notice that he was going on leave, he had to deal with BHPB.

158   At no time after some months (I am not able to exactly quantify the number of months) was Mr Brandis a casual employee of anyone.  His contract as a casual employee and the contract of hire ceased, as I have said above, because the basis of it, that he was a temporary or casual employee, ended.  That is because the parties had not labelled that relationship a casual one, only his temporary employment which had ended.  Further, the parties could not attempt to use a label in any event to render the continuing and ongoing relationship between BHPB and IW as something different, or for that matter, even though IW and BHPB attempted by reference to the IW/BHPB documents, to do so.

159   In this case, there were a number of indicia pointing to the fact that Mr Brandis was not a casual employee.  That is obvious for the following reasons.  He had an expectation, which was met, that he would be, and was, employed on a long term basis, and he was so employed with no written contract applying.  He was rostered continuously for over three years to work for BHPB and this roster continued weekly, being published by BHPB in advance.  He regularly worked rostered hours per week, his employment was regular and there was a long term continuing and well met mutual expectation of continuity of employment of him by BHPB.  He had prescribed starting and finishing times, prescribed by BHPB for the shifts which he was rostered to work, and worked.  He was required to give notice if he was not going to work (see the incident at Christmas 2003 as an example).

160   In short, after the expiry of the fixed term of any contract of service with IW or period of hire with BHPB, the concept of casual employment, which was not submitted to be the subject of any award prescription in this case, connotes clearly and certainly that Mr Brandis was an employee who did not work under a series of separate and distinct contracts of employment entered into for a fixed period to meet the exigencies of particular work requirements of the employer.  There was in existence a single and ongoing contract of employment of Mr Brandis by BHPB of indefinite duration.  That was a contract of totally different character from any contract initially entered into by Mr Brandis with IW or anyone else.  The new contract was so different in character as to constitute evidence by itself that a new contract had been entered into.

161   The contract of employment commenced with BHPB was not contemplated by IW, Mr Brandis or by BHPB and IW in their earlier written agreements.  The written agreements did not contemplate or provide for a single ongoing contract of indefinite duration, within the meaning of the ratio in Serco (Australia) Pty Ltd v Moreno (FB) (op cit) and the authorities cited therein.

162   He was not a casual worker as that term was defined by a Full Bench of this Commission in Serco (Australia) Pty Ltd v Moreno (FB) (op cit).  He was, to all intents and purposes, and was, in fact, employed on a continuing permanent indefinite basis which was completely contrary to the terms of the BHPB/IW contract and the Brandis/IW contract and their bases which was that he was a temporary employee on a discrete assignment.

163   Further, the term of assignment had expired, as had the hire contract, without any written notice of intention to continue it.  In my opinion, it was open to find that the written contract ended between BHPB after it terminated by its express terms on 30 June 2001.  It followed that the AWA which was signed purported to regulate a relationship which did not exist because it was signed on 7 October 2002.  In any event the hiring contract in relation to Mr Brandis also ended. 

164   The contract between IW and Mr Brandis was of a completely different type from that which took its place with BHPB.  The change in the nature of the contract is evidence of the abandonment of the contract between IW and BHPB and of that between Mr Brandis and IW.  Further and in the alternative, it is evidence of a tacit consent to the termination of Mr Brandis’ employment by IW and BHPB’s hiring of his services from IW.  There was therefore a new contract on different terms although it is not clear in their entirety what they were.

165   That was the evidence that the contract of employment with BHPB was terminated or varied.  In addition, Mr Brandis was subject to the actual control of BHPB when he worked, where he worked and what work he did by rostering him.  IW therefore had no control, actual or real, over him and no actual or real control in the sense that it could not say when he was to cease his employment because that right was conferred on it by the written agreements which ended when they were abandoned or ended by tacit mutual consent after his employment ceased to be by finite discreet assignment.

166   The only right of control and the only actual control was as a matter of evidence vested in BHPB which exercised that control in most facets of Mr Brandis’ day to day working life.  That was very significant.  Organisationally he was for approximately three years part of BHPB’s organisation and thoroughly integrated in it.  He was fed, accommodated, his fares were paid, and he was trained and disciplined by BHPB and included in meetings and BHPB’s services such as the full life program in the same manner as employees.

167   He drove his train and did his work, supervised and directed throughout the day by BHPB, which was the only entity involved in this matter capable through knowledge and experience of so doing.  He was disciplined by BHPB.  In reality, the investigation of alleged disciplinary breaches was conducted solely by BHPB and the penalty fixed by BHPB.  There was no evidence that IW prescribed any safety standards or in any way ensured that he worked safely as its agreement required.  The judge of what safety standards he had breached and the imposer of safety standards was, at all material times, BHPB.  There was no evidence that any of this was done by IW.  It was submitted that BHPB had a statutory duty to ensure that its employees and independent contractors and sub-contractor employees complied with the Mines Safety and Inspection Act 1994 (as amended) and the Mines Safety and Inspection Act Regulations 1995 (as amended) and the BHPB rules and any other rules or regulations.  That, of course, is indisputably the case.  However, that he was required to comply was not, as a fact by itself, an indication that he was an employee.  Further, it was not an indication that he was not an employee.  However, that he was being overseen and supervised in safety matters by BHPB and that the right to so supervise him and ensure safe working formerly vested in his putative employer, IW, was vested under the new contract in BHPB was entirely compatible, along with all other matters, in his being an employee of BHPB.  I have already pointed out the disciplinary proceedings which are a manifestation of that.

168   That IW merely rubber stamped the penalty, which BHPB decided in regard to Mr Brandis’ August 2002 safety breach, and communicated to Mr Brandis what that penalty was, was evidence that IW was only a mere conduit between BHPB and Mr Brandis or a mere agent of BHPB.  After June/July 2001 or at some time after, but at a material time, the vestiges of obligations and duties resting in IW again showed it to be a mere conduit between BHPB and Mr Brandis.

169   It was accordingly open to find also, along with the other evidence, that Mr Brandis was required by BHPB to act in accordance with the rules because he was an employee and disciplined by BHPB as an employee.  It is to be noted that it was no party’s case that he was an independent contractor.  He was an employee of someone.  That also was strong evidence of actual control and the right to control him.

170   It is also significant that not only did IW in no way supervise or have any part in Mr Brandis’ safe working, or his work at all, but they had no knowledge or ability to do so.  IW had no knowledge of running railways or supervising and assessing locomotive drivers’ abilities.

171   His wage remained as it was under the IW contract, as agreed between IW and Mr Brandis, but that was consistent only with BHPB and he adopting that wage, and, of course, IW then said that he was entitled to be paid in accordance with the AWA.  However, that is contrary to the reality because he was no longer an employee of IW at the time the dispute arose.  It was consistent with BHPB being the arbiter of his remuneration that BHPB told him that his remuneration was to be unilaterally reduced.  Mr Brandis then had discussions with both IW and BHPB.  However, IW purported to act as if it had the power to resolve the matter and as if the AWA still operated.

172   Admittedly there was no evidence of who had the right to dismiss him, but if there were otherwise a contract impliable it would be clear that as a term of the contract that BHPB had the right to dismiss him.  Some evidence of that can be gleaned from the fact that BHPB took it upon itself to discipline him and investigated the alleged breach of safety rules in August 2002.

173   There was no evidence that he was given leave, paid or not.  However, that is something of a neutral fact because it may not have been paid to him because he was not regarded as an employee, even though he were an employee.  In any event, as an employee the leave provisions of the Minimum Conditions of Employment Act 1993 would apply to him if no others did, as would sick leave, redundancy and other provisions, since they would become terms of his contract of employment with BHPB by virtue of s5 of the Minimum Conditions of Employment Act 1993, although that matter was not argued before us.

174   For the reasons which I have expressed above, BHPB, the provider of Mr Brandis’ safety gear, his messing, his accommodation and travel was, on that evidence also, in an employer/employee relationship with him.  All of the work equipment quite obviously was provided, it consisting of locomotives.  He used no IW equipment and could not.  His operation of that said work equipment down to the use of fuel was controlled by BHPB.  There is no evidence of BHPB deducting any income or other tax.  His competence for the work was effectively tested and approved by BHPB, not IW.  He was employed on BHPB references.  Very significantly, the standard of his work was and could only be measured and supervised at all times by BHPB.  IW did remain responsible for and paid his wages, superannuation and maintained the relevant workers’ compensation and common law insurance policies, but that is not determinative of the relationship on its own.  Further and alternatively, his economic dependency, which is of a great of importance, and his organisational integration were to and in the BHPB Railways and nowhere else.

175   The fact that the obligations were contained in express contracts made between Mr Brandis and BHPB does not prevent their being read across the triangular arrangements or otherwise.  Thus, there was an implied contract to take effect as implied obligations between Mr Brandis and BHPB conferring, for example, a right to dismiss.

176   Quite clearly there was no discrete temporary assignment on any basis as provided in Forstaff and Others v Chief Commissioner of State Revenue (op cit) in that the temporary employment agreement, which was the basis of that case, where temporariness was prescribed and emphasised as it was not here.  Costello v Allstaff Industrial Personnel (SA) Pty Ltd and Bridgestone TG Australia Pty Ltd [2004] SAIR Comm 13 is also distinguishable because it referred to short term and discrete hire contracts.  Similarly, Building Workers Industrial Union of Australian v Odco Pty Ltd (1991) 29 FCR 104 is distinguishable on that basis.  There were a number of authorities from England and elsewhere which were persuasive only and I prefer the reasoning which I have adopted in this case, for the reasons which I have expressed.  Alternatively, a right to dismiss by a triangular agreement was vested in IW by the agreement between BHPB and IW as part of the distribution between them as employers of rights and obligations.

177   I have already observed that Forstaff and Others v Chief Commissioner of State Revenue (op cit) is distinguishable because that was not a case where employees were contemplated as being any more than temporary employees unlike this case where there was an ongoing continuing contract of employment with clear control, actual control and the right to control being vested in BHPB, and/or alternatively a distribution of rights and obligations between the two employer parties.

178   IW had long surrendered the right to actual control over Mr Brandis.

179   As against those indicia, the following indicia require consideration.  IW continued and were continuing as at the date of hearing at first instance to pay the hourly remuneration required to be paid to Mr Brandis under their AWA.  IW was still paid as at the date of that hearing $71.00 per hour by BHPB being the original hourly rate contracted to be paid by BHPB which was, of course, different from the $50.25 an hour remuneration paid by IW to Mr Brandis.  However, that that occurred in the face of the preponderance of evidence against the proposition is only evidence of the payment of remuneration by IW to Mr Brandis and of a fee to IW by BHPB.  There is, for example, no evidence that IW in any way reserved any right to deal with industrial relations as far as it involved Mr Brandis.  That is entirely incompatible with an employment relationship.  I have already dealt with IW’s role in merely informing Mr Brandis as a conduit of the penalty actually imposed by BHPB after its own investigation, in relation to the incident of August 2002.  The payment by IW of his agreed wage to Mr Brandis was not, for the reasons expressed above, paid as anything but a conduit by IW.

180   In any event, the fact that one person pays the monies concerned in a contract of employment does not necessarily mean that that person is the employer.  The maintenance and insurance policies and payment of superannuation by IW were also more consistent with IW being an employer.  In the absence of actual control, however, or the evidence of the right to control,  that evidence was too flimsy to evidence a contract of employment between IW and Mr Brandis or the continuation of one, at any relevant or material time.  In any event, the insurance policies to be maintained were only maintainable with the approval of their effectiveness by BHPB, which is entirely incompatible with IW being the employer.  Further, the provision of safety gear, airfares, messing, accommodation and all equipment by BHPB counterbalanced those factors also.

181   That Mr Brandis sought to apply for a job with BHPB is not evidence that he was an employee, in the face of all of the other evidence, if the label applied to the relationship between BHPB and Mr Brandis, and IW and Mr Brandis, was false or not borne out by the totality of the circumstances surrounding both.  That BHPB unilaterally attempted to reduce Mr Brandis’ wage and that he entered discussions with both IW and BHPB, culminating in his seeking that the Employment Advocate tell him what his real entitlement was under the AWA, is also not a determinative factor on its own.  It is not a determinative factor because he discussed the matter with both parties, more as if they were joint employers rather than if they were separate employers.  In any event, if he had recourse to the AWA and it was no longer operative, that matter is not at all of significance.  Further, it is also reduced in any significance if the label applied to the contracts was wrong, and if the contract of employment, at all material times, was between BHPB and Mr Brandis, as I have explained that it was above.

182   On a consideration of the totality of the relationship between BHPB and Mr Brandis, as well as having regard to the other criteria to which I have referred above, at all material times, Mr Brandis was integrated in and worked in the BHPB railway system, was treated in the same manner and was, to all intents and purposes, subject to the actual and relevant control of BHPB whose employee he had become.  That he became so was brought about by a similar mechanism as brings about transfers, pro hac vice, in the doctrine applicable to matters of vicarious liability (see my discussion of the principles discussed by Ashley J in Deutz Australia Pty Ltd v Skilled Engineering Ltd and Another (2001) 162 FLR 173).

183   It was open and correct to find that BHPB was required at all times to pay Mr Brandis’ remuneration and that he was integrated into the BHPB railways organisation and the BHP Pilbara Railway System.  Further, he was economically dependent on BHPB.

184   Next, although control is not a single determinative factor any more, the existence of actual control and the right to control was vested only in BHPB as a significant criterion of the existence of a contract of employment.  That control was exercised and maintained daily in great detail.  There is, and was, a complex mosaic of control, supervision, disciplining and the right to measure his work standards by BHPB.  There are also the other matters, including at least for some time, the provision of uniforms to which I have referred above, which make that control a significant fact.  All of those matters, including the provision of equipment, fares, accommodation, messing etc. lead to the conclusion that Mr Brandis was controlled by BHPB and that nobody else had the right to control him.  That is a significant factor, but there are as well all the other factors to which I have referred above.

185   As was said, however, in Dalgety Farmers Ltd t/a Grazcos v Bruce and Another (op cit) and as is consistent with what was said in Hollis v Vabu Pty Ltd (op cit), whilst there is a consideration which has helped to shift the focus away from a simple inquiry as to control or right of control, as that is the changing nature of employment in Australian society today, these considerations are not reasons for ignoring the right or actuality of control or the search for the “essence” or “totality” of the relationship, properly understood.  The essence and totality of the relationship, having regard to all of the evidence to which I have referred above, and all the indicia to which I have referred above, for the reasons which I have expressed, lead to the conclusion and I would so find that Mr Brandis was, at all material times, an employee of BHPB.

186   Indeed, this matter can be summed up to some extent as Wilson and Dawson JJ put it in Brodribb Sawmilling Co Pty Ltd (op cit) at page 37:-

“Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. (my emphasis)”

187   In this case, that question can be answered for the reasons advanced by me, but after the end of June 2001, on all of the evidence to which I have referred above, Mr Brandis was acting as an employee of another, and that other was unequivocally and exclusively BHPB, he was not acting on his own behalf, and he was not acting on behalf of IW, notwithstanding that vestiges of the original expired contract between BHPB and IW, and the original terms of the AWA, conferred some obligations which were obligations on IW and remained only as vestiges of the original contracts.  They did not, however, mean that IW, in the face of all of the other evidence and indicia, was anything more than a conduit for BHPB or an agent for BHPB.

188   Ultimately and conclusively, the preponderance of the evidence could lead to only one conclusion.  That was and is that, at all material times, Mr Brandis acted as the servant of BHPB and not on his own behalf, and the answer to the question raised in Brodribb Sawmilling Co Pty Ltd (op cit) at page 37 as quoted above, was indicated in ways which might have a different significance from other cases, but in this case lead to the above conclusion.

Intention to Enter Legal Relations, Consideration or Mutuality of Obligation and Offer and Acceptance

189   I now turn to the question of intention.  There is evidence of an actual intention to engage IW in the matter on the part of BHPB, IW and Mr Brandis, but that intention died when the discrete temporary assignments or assignment of Mr Brandis ended.  In any event, it is only peripheral and consistent with the vestiges of IW’s role under the IW contracts surviving and meant only that IW was a conduit, it having no responsibilities or liabilities except of a mechanical nature.  Further, the payment of Mr Brandis’ wage by IW does not of itself indicate that IW was his employer; nor does the payment of superannuation and workers’ compensation and the maintenance of those policies, particularly given that the policies could not be maintained unless they were maintained in a form approved by BHPB.

190   True it is that IW intervened and invoked the AWA at Mr Brandis’ behest, but that was only after he was unable to reach agreement with either of them, and, in the end, both of them paid the monies which he had been wrongly deprived of when there was a dispute over the rate of pay to which he was entitled, but it is to be noted that primarily the dispute was with BHPB not with IW.

191   On all of the evidence, there is insufficient to establish, as I have explained it above, that there was an intention to continue with the contract between BHPB and IW and IW and Mr Brandis and that they therefore ended by abandonment or mutual tacit consent.

192   Next, I come to the question of mutuality of obligation.  There is no doubt that Mr Brandis agreed to work as a locomotive driver on a long term basis and did so and BHPB agreed to remunerate him for so doing, and did so, albeit that it used an existing mechanism from the expired contract.

193   Mr Brandis, too, clearly applied for the position of engine driver with BHPB.  This was said to be evidence both of intent and otherwise that he was an employee of IW and not BHPB.  However, Mr Brandis thought that he was a casual employee and not a permanent employee when he applied, when he was not, and he also though he was not an employee of BHPB, which, on the evidence, and on an objective consideration of the written documents and all of the circumstances he clearly was.  That expression of intent was too equivocal in the face of all of the other objective evidence to attach any significance to it.  The real unmistakeable impliable intent from the totality of the facts, for the reasons which I have expressed, was that Mr Brandis entered into a contract of employment with BHPB, that there was a mutuality of obligation in that he worked for BHPB by way of a contract of service and, by way of the same contract of service, BHPB undertook to pay him albeit by the medium of IW.  I reinforce the implication of a contract from these facts later in these reasons, and especially by reference to Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit).

194   I find that, at all material times, Mr Brandis was employed by BHPB.

Joint Employment – Employment by BHPB or BHPB and IW Jointly

195   The ultimate question, as I have observed, to be decided is whether Mr Brandis was acting as an employee of another, (ie) BHPB, and the answer to that question is indicated in the ways which I have canvassed above, and clearly indicates that his employer was, at all material times, BHPB.  Further, it is quite clear that, having regard to the actual intention of the parties, that was so.

196   There is another line of reasoning which supports such a finding, even though it overlaps somewhat with what I have discussed above, and that is that line of reasoning which appears in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit), a Court of Appeal of England judgment.  Mummery LJ in that case observed that the:-

“development of “complex employment relationships”, which flourish on the theoretical freedom of the people in the labour market to make contracts of their choice has added to the difficulty of deciding whether an individual, doing paid work for another, does so under a contract of service and, if so, from whom.”

197   The question in this case is, of course, “from whom”?

198   The common law notion of a contract of service has to be applied by the courts or this Commission in the employment rights context to constantly changing conditions in and outside the workplace.  The general principles of the law of contract are sufficiently flexible to cope with many changes; but sometimes only legislation can supply the solution that the common law is unable to deliver.

199   Further, if in the manner of schemes to avoid tax liability, and this is my own observation, agreements are struck which have the end result of avoiding the obligations otherwise thrust on the parties by awards or other industrial instruments, then these should be carefully scrutinised by this Commission so that there is no avoidance which can be effected by stratagems and devices.

200   In parenthesis I observe that it is arguable that a contract or contracts which enable a party or parties to avoid legitimate liability might offend s114 of the Act, even if there are separate contracts.  I take that matter no further for the moment.

201   As His Lordship observed, a particular problem in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit), and as in this case, arises from a triangular set up for work applied to casuals, which is not necessarily temporary from the point of view of the employment industry, although in this case it was expressed to be.  This case is stronger than Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) because, after a while in this case, there was no longer any casual or temporary employment, but the continuing ongoing employment of Mr Brandis by BHPB.  However, within the triangular sides of a case such as this or Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit), various contractual relationships are expressly created and documented in detail in connection with the organisation of the work to be done by individual workers (ie) type, place and hours of work, rates of pay, dismissal, and so on.  The rights and obligations normally found in employment relationships are, however, distributed differently in the contractual documents thereby creating an initial impression of functional dislocation.  That is what purports to be created here.  This, as the case for the respondents is, is that Mr Brandis not only found work through the agency, but the agency paid for the work done for the end user, BHPB, the other two parties being hirer and worker (see the discussion of these matters by Mummery LJ in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) and see his reference to Professor Freedland’s work “The Personal Contract of Employment”, 2nd Edition, (2003) at page 55).

202   The specific legal question which arises in this approach to employment in this case is whether the appellant worker is under a contract of service express or implied when the worker has entered into a written agreement expressed to be a contract for services and not a contract of service with an employment agency, and the employer has entered into a express contract with his client (ie) the end user of work done by the worker, for the provision of “agency staff” including the worker, but no formal contract of any kind has been entered into between the worker and the end user, in this case BHPB.

203   That is, of course, the contractual situation as the respondents submit it to exist in this case, save and except that the question of whether Mr Brandis was an independent contractor does not arise.  He was, it is quite clear, and it was not argued otherwise, someone’s employee.  The respondents submitted that he was IW’s.

204   This is a case again like Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) where the worker has done work and not done it temporarily at the end user’s premises; or, to put it properly in the context of this case, at the end users, BHPB’s mine site, and under the control of BHPB, the end user, which has indirectly paid the appellant worker for the work done by means of regular payments to the labour hire agency calculated according to timesheets of work done for the end user, and provided by the end user.  It is fair also, however, to say in this case that it may well have been, and probably was the case, that at the expiry of the written agreement between IW and BHPB that there was not any purported hiring contract between Mr Brandis and IW or BHPB and IW in existence, for the reasons I have already discussed.

205   There is a main difficulty in tracking down a relevant contract of service under which Mr Brandis worked if one follows the line of reasoning in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit), which Mr Schapper urged us to follow.  Without a contract of service as required by the statutory definition of employee in England or, in this case, for the purposes of the appellant’s case, without a contract of service at common law, the claim rests alone on the alleged unfair refusal to employ Mr Brandis.  It is clear that paid work was done by Mr Brandis. No-one disputes that, but it was said that it was done by a contract of service with IW not BHPB.  There is no doubt that BHPB and IW are entitled to arrange their affairs in the manner in which they have purported to do so.  However, as Mummery LJ in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit):-

“As in other areas of law, however, they must be prepared if and when the matter is contested, to meet the challenge of general interpretative principles that the legal nature and effect of connected or associated transactions and the documents evidencing them are not ascertained by considering them in isolation from each other or by divorcing them from their context.  It is legitimate to have regard to the fact, if it be the case, that a series or number of transactions are intended to operate in combination with one another or are ingredients of a wider transaction intended as a whole.”

206   It will be apparent that I have applied that reasoning in my earlier discussion of these matters under this head.

207   However, therefore, in ascertaining the overall legal effect of the triangular arrangements on the status of Mr Brandis, the Commissioner at first instance was not required to concentrate so intently on the express terms of the written contracts entered into by IW because of that principle expressed by Mummery LJ and which I have just quoted. More importantly he was required not to do so, so that he was deflected from considering and finding facts relevant to a possible implied contract of service between BHPB and Mr Brandis in respect of the work actually done by the latter exclusively for BHPB at BHPB’s premises, under its control and which he remained doing, and which he performed at BHPB’s actual expense.  I respectfully adopt that reasoning which I have in part directly quoted from the judgement of Mummery LJ, and in part have extracted, as reasoning from his judgment.  I am therefore of the opinion that that reasoning supports the finding that there was an implied contract of service at all material times between BHPB and Mr Brandis.  That reasoning also provides a basis for a finding that there was in the alternative a trilateral contract of service, that is a simple contract of service in which one side’s obligations, in this case BHPB and IW, were divided or shared between the two parties, BHPB and IW.  That is that in the alternative they were joint employers of Mr Brandis at all material times.

208   If that be wrong, then the question arises whether Mr Brandis was an employee of BHPB by virtue of the two written agreements.  That is because there is no reason why one employee cannot be employed by two or more persons, natural or corporate (see, for example, Matthews v Cool or Cosy Pty Ltd (FB) (op cit)).  Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) is authority for that proposition, too, or at least that such a probability exists.

209   However, there is also strong authority in Australia which arises in the law of torts in relation to vicarious liability, but owes itself to the law of contract, that there can be two employers of an employee, or more than two.

210   This question has been thoroughly canvassed in that context by Ashley J in Deutz Australia Pty Ltd v Skilled Engineering Ltd and Another (op cit), where His Honour recognised that an employee could be transferred pro hac vice to the employment of another provided, of course, that the employee consented, which was clearly the case here (see per Ashley J (op cit) at pages 187-190).

211   Such a transfer, notwithstanding the documents in this case, can be discerned:-

(a)          In a case where the general employer does not provide man and machine, as was the case here.

(b)          Such a transfer may be discerned where the alleged hired worker, despite a machine being hired out, is bound to work the machine according to the orders and under the entire and absolute control of the hirer.

(c)          The contract made between general and temporary employers so called cannot determine whether there has been a change of masters for the purposes under discussion.

(d)          Circumstances in which a transfer may be discerned are as follows:-

(i)            Where the hirer can direct not only what the worker is to do, but how he is to do it.

(ii)         Where the hirer is entitled to tell the employee the way in which he is to do the work.

(iii)       Where the complete dominion and custody over the servant is passed from one to the other.

(iv)        Where by an agreement the employer vests in the third party complete or substantially complete control of the employee so that he is not only entitled to direct the employee what he is to do but how he is to do it.

(v)          Where it can be said that the hirer has such authority to control the manner in which the worker does his work that it can be said that the worker is serving the hirer, not merely serving the interests of the hirer.

(vi)        Where it cannot be said that the reason that the worker subjected himself to the control of the so called temporary employer as to what he did and how he did it was that his general employer told him to do so.

(vii)     Where it can be said that the servant was transferred not merely for the use and benefit of his work.

212   In this case, a transfer of a permanent nature occurred because almost all of those criteria were met.  The transfer was certainly continuous, ongoing and indefinite.  Alternatively, IW and BHPB were and remained joint employers from the beginning until the hearing at first instance and perhaps thereafter.

213   Every case must, of course, be considered on its merits, but I would suggest by analogy that there is a substantial burden resting on IW in this case, in that respect. 

214   Some assistance can be derived from some of the authorities cited by His Honour, namely the well known case of Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1, and the dictum of Brennan J in Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd [1985-1986] 160 CLR 626 at 668 where His Honour said:-

“The rule to be derived from Mersey Docks and McDonald is not that two persons cannot be vicariously liable for the same damage or that an employee cannot be the servant of two masters, but that two employers of the same servant who negligently causes damage will not both be liable for the damage if one rather than the other has what Jordan C.J. called “the relevant control.”

215   Stevens and Gray v Brodribb Sawmilling Co Pty Ltd (op cit), as Ashley J observed, has little to say about questions whether a worker is pro hac vice the servant of an asserted temporary employer.  Those authorities deal with the case where one person was allowed by an employer to work for another pro hac vice, that is temporarily.  That is, of course, what is alleged was the case here.  However, the relevant control referred to by Jordan CJ in McDonald v Commonwealth (1945) 46 SR (NSW) 129 and by Brennan J in Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (op cit) at page 668 specifically identifies the features of a joint contract of employment of a triangular nature of the type discussed by Mummery LJ, with whom Sedley LJ agreed in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit).  All of those is borne out by the same evidence to which I have referred above, which includes evidence of the right to control and actual control.

216   Put another way, too, there is nothing to prevent one employer acting as agent in employment for both employers.  This was recognised by a Full Bench of this Commission in Matthews v Cool or Cosy Pty Ltd (FB) (op cit)).

217   The written agreements which purport to recite that Mr Brandis can never be an employee of BHPB and the labels applied to both relationships by the agreements are only one factor to consider.  As Mummery LJ said in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) an entire industry for the supply of workers has been established and is, in practice, conducted on the basis for which there is support in the cases that an individual is not employed under a contract of service if the end user who exercises day to day control over the work is not contractually bound to pay remuneration to the worker.  That doctrine is wrecked on the reef of joint employment under the common law of Australia which I have explained above.  I would emphasise clearly that, for the same reasons expressed above, there was an intention to enter into such an impliable contract. I add that there was impliable too, in this case, the performance of mutual obligations and an intention to enter into and actually exercise legal rights, as well as a clear offer by the employer BHPB and acceptance by the employee, Mr Brandis.

218   As His Lordship observed, too, the development of “complex employment relationships” which flourish on the theoretical freedom of people in the labour market to make contracts of their choice has added to the difficulty of deciding whether an individual doing paid work for another does so under a contract of service, and, if so, for whom.

219   In this case, on the authority of Deutz Australia Pty Ltd v Skilled Engineering Ltd and Another (op cit) and Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit), it was open to find and the Commissioner should have found, if the written agreements bound Mr Brandis and IW and BHPB, that the clear intention and mutuality of obligation to be extracted from the agreements was that Mr Brandis was, at all material times, working for BHPB or both of them and they had an obligation, or BHPB did on its own, to remunerate him.  That is because the agreements provided and the evidence was that, at all material times, Mr Brandis was under the actual control of BHPB.  Further, it is because there was no evidence that IW exercised any right to control him but, on the evidence, surrendered that right to BHPB.  IW did not even produce, nor was it capable of so doing, a safety plan for the operation of any locomotive which Mr Brandis was driving, which is incompatible with his being an employee of IW.

220   In any event, the safety requirements were those which BHPB approved, even if IW produced a safety plan, which it did not.  How that, in any event, could be done in the face of the statutory requirement for and approval of the BHP Pilbara Railway Rules is difficult to see.

221   Again, an unconditional power to remove Mr Brandis from the site if his work was unsatisfactory in the judgment of BHPB was vested in BHPB in the terms of clause 25 of the relevant agreement.  That meant an unconditional power of dismissal.  I have already referred to relevant provisions of these agreements in detail, including the right of selection of employees by BHPB, to their induction by BHPB, and the right to supervise their induction, and to the integration of employees such as Mr Brandis in the organisation of BHPB’s railway system.  The reserving of control and its actuality is exemplified by BHPB controlling all industrial relations matters which would include, by definition, dismissals, demarcation disputes, terms and conditions of employment, terms and conditions of industrial instruments, what industrial instruments should be entered into, and the almost limitless range of matters which can be described under the heading of “industrial relations”.

222   Further, there was a number of other matters such as the provision of accommodation, airfares, messing and the like which were the obligation of BHPB under the agreement.  There would be the coverage of Mr Brandis’ rates of pay pursuant to any industrial agreement.  Even the insurance to be maintained by IW was, by policy, approved of by BHPB.  On a reading of the whole of the documents and their terms, and read together, the intentions are clear.  At all material times, Mr Brandis was to be an employee of BHPB.  IW had little or no say in anything which occurred.  Even its entry into an AWA with Mr Brandis was an act which BHPB was required to approve.

223   Within the concept of a triangular agreement between the three parties, as discussed in Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) above, and for those express reasons, Mr Brandis was, at all material times, the employee of BHPB.  Further and alternatively, if that was not so, the terms of the written agreements, dealt with in the manner in which Brook Street Bureau (UK) Ltd v Dacas (CA) (op cit) suggests they might be dealt with, clearly give rise to a finding that BHPB and IW entered into a clear agreement to jointly employ Mr Brandis as their employee with the right to control vested in both, and actual control vested in BHPB.  Mr Brandis in turn entered into a contract of employment with them as joint employers and an AWA entered into on their joint behalf by IW as the agent of the two of them.  As a result, various rights and obligations were exercised by and undertaken by both BHPB and IW as employers, as I have explained the evidence above.  This was in relation to each other as joint employers and in relation to Mr Brandis as their employee.  All the parties also derived benefits from the contract of employment.  Further, joint employment could not necessarily be an obstacle to an order or declaration that any award which Mr Brandis could be employed under covered him.

224   In any event, whether there was joint employment or mere employment by BHPB of Mr Brandis, it is clear that, at all material times, Mr Brandis was an employee of BHPB so that it was entirely unnecessary for him to apply for employment with BHPB and go through the selection process about which he complained at first instance.  I would so find and I would also find that the Commissioner erred in not so finding.

225   For those reasons, too, I find that, at all material times, Mr Brandis was employed by BHPB, or alternatively jointly by IW and BHPB.

The American Doctrine of Common Employment

226   Alternatively, the American doctrine of common employment can be applied within the common law of Western Australia, as I explained in Tricord Personnel v CFMEU 84 WAIG 1275 (FB),  and should be so applied.  In that case, I said this:-

 “I want to add that there is scope, in my opinion, within the existing industrial jurisprudence of this State, for the application of a doctrine called the “joint employment doctrine”. Such a doctrine was discussed in Morgan v Kittochside Nominees Pty Ltd (2002) 117 IR 152 at 175 where a Full Bench of the Australian Industrial Relations Commission said:-

  “… we would incline to the view that no substantial barrier should exist to accepting that a joint employment relationship might be found and given effect for certain purposes under the [Workplace Relations Act]”. (See per Munro J, Coleman DP and Gay C).

 (See also a paper delivered on 6 May 2002 by Munro J “Industrial Tribunals: Challenges and Opportunities”, page 3 of 15)

 At the core of that doctrine, as I understand it, is the notion that, where the user of the labour, and the employer who rents out the labour, jointly exercise effective control over enough incidence of the employment, both are held to be employers for the purpose of their duties under the United States National Labour Relations Act. (The application of such a doctrine was canvassed by McKenna C in Oanh Nguyen and A-N-T Contract Packers Pty Ltd v Thiess Services [2003] NSWIR Comm 1006 (unreported 3 March 2003) and AFMEPKIU v Waycon Services Pty Ltd (2002) 120 IR 134).

 Some notion of joint employment in a different context was clearly approved by a Full Bench of this Commission in Matthews v Cool or Cosy (2004) 84 WAIG 199 (FB). (I refer also to a paper by Mr R Cullen “A Servant and Two Masters? – The Doctrine of Joint Employment in Australia” (2003) 16 Australian Journal of Labour Law 359).

 It seems quite obvious to me that where there is a power to hire and dismiss or have dismissed an employee, where there is a right to supervise, improve and inspect work, where there is the control of the workers work schedule and other conditions of employment, where there is involvement in a bargaining process for employees; the ability to discipline workers, the handling of dispute resolution, and whether the worker may refuse to work for the company and other factors; then there may be joint employment. (See Texas World Service Co Inc d/b/a World Service Company v National Labor Relations Board (1991) 928 Federal Reporter 2nd Series 1426 (United States Court of Appeals Fifth Circuit) and also North American Soccer League and Others v National Labour Relations Board (1980) 613 Federal Reporter 1379 at 1381-3 (United States Court of Appeals 5th Circuit)).

 In other words, the doctrine would apply where multiple employers “share or co-determine those matters governing essential terms and conditions of employment”. It depends on the control one employer exercises potentially over the labour relations policy of another (see Matthews v Cool or Cosy (FB) (op cit)). In any event, I see no obstacle to an employee entering into a contract with two employers where the service which he renders to one is to serve the other. That involves, inter alia, a contract where with the consent of the employee, the labour hire agency employer delegates, as it plainly did here, its right to control the daily work and attendance at work and behaviour at work to a limited extent of the employee. Whether there was sufficient evidence of joint employment on the criteria to which I have referred above, is not a matter which it falls to me to determine in this case.”

227   That is the basis upon which the American doctrine of common employment can form a basis for the application of a doctrine of joint employment within the common law of Western Australia.

228   For those reasons, too, in the alternative, I would find that Mr Brandis was jointly employed, at all material times, by BHPB and IW.

The Effect of the AWA

229   I turn to the submissions relating to the effect of the AWA.  As I have already explained, an AWA is not a contract of employment.  It is a statutorily created industrial instrument which is not part of the contract of employment, nor are any of its terms and conditions (see Byrne and Frew v Australian Airlines (HC) (op cit)).  Its existence cannot vitiate the existence of a joint contract between IW and BHPB, particularly where BHPB controls all aspects of industrial relations between Mr Brandis and IW because BHPB can veto anything done, including insurance policies of which it does not approve, Mr Brandis’ right to remain on site, and every aspect of industrial relations, including what agreements can be entered into or terminated between the parties.  IW is, at best, a conduit and something of a cipher.

230   Within the meaning of s170VQ(4) of the WR Act there is nothing to prevent one party undertaking the obligations to the employee which both parties contemplate, particularly given that BHPB must have approved of the agreement and had to be informed of its terms before it was entered into.

Validity Of Any Orders

231   Further, insofar as it is necessary to consider the validity of any order requiring that Mr Brandis be employed on a State award for the reasons which I have advised above, the AWA is no longer valid since there is no employment relationship to support it.  Secondly, I would not see any obstacle, if the employers were joint employers, to the ordering of BHPB to invoke the agreement with IW to terminate the AWA.

232   Further, there is nothing to prevent Mr Brandis terminating the AWA himself if an order that he be employed on award terms was made.  Moreover it is not to the point to submit that a finding of joint employment should not be made because such a finding might have effects which are difficult to deal with, as the submission was made.  That has been and could not be an obstacle to the development of the common law of labour hire contracts and for the same reason if joint contracts are part of the common law, as I am prepared to find that they are.

Conclusion

233   Thus, I would find that grounds 1 and 2 should be made out, and conclude that Mr Brandis was, at all material times, an employee of BHPB by virtue of an implied contract between them.  Alternatively, he was, at all times, an employee jointly of BHPB and IW, with both parties responsible for the discharge of some obligations to him and to each other and the enjoyment of certain benefits due to the contract between them.  Thus, because that was so, he was not required to apply for permanent employment, being already a permanent or continual employee, he remained an employee on a continuing and permanent basis, and, indeed, had no need to make any application for any permanent position, since he already enjoyed one.

234   I would add as something of a postscript that there is no merit in the submission by Mr Schapper that there was de facto employment of Mr Brandis by BHPB.  It is a concept simply not known to law and cannot be supported on the flimsy foundation of s26(1)(a) of the Act.

Ground 3

235   This was an appeal against the finding that the refusal to employ Mr Brandis was not unfair in all of the circumstances.  This was a matter which was required to be judged according to s26(1)(a) of the Act, according to the equity, good conscience and the substantial merits of the case, and having regard to the interests of all those directly and indirectly interested (see s26(1)(c)).

236   The decision to be made was a discretionary decision as that term is defined in Norbis v Norbis [1986] 161 CLR 513 (see also Coal and Allied Operations Pty Ltd v AIRC and Others [2000] 203 CLR 194).

237   It is for the appellant, if it is to succeed on appeal, to establish according to the principles laid down in House v The King [1936] 55 CLR 499 and in Gromark Packaging v FMWU (1992) 73 WAIG 220 (IAC) that the exercise of the discretion at first instance miscarried.  Unless the appellant establishes that, there is no warrant in the Full Bench to interfere with the exercise of the discretion at first instance, and certainly no warrant to substitute the exercise of its discretion for that of the Commissioner at first instance.

238   There was some question of credibility about the selection process.  Fox v Percy (2003) 214 CLR 118 is authority for the proposition that Jones v Hyde (1989) 85 ALR 23 at 27 (HC), Abalos v Australian Postal Commission [1990] 171 CLR 167 at 179 and Devries and Another v Australian National Railways Commission and Another [1992-1993] 177 CLR 472 at 479, 482-483, are a reminder of the limits which typically operate when appeal courts or tribunals are considering the findings of trial judges or tribunals.  Devries and Another v Australian National Railways Commission and Another (HC) (op cit) has been followed in many appeals by Full Benches of this Commission.

239   However, Fox v Percy (HC) (op cit) is also authority for the proposition that the instruction contained in those cases cannot derogate from the obligation of the Full Bench in accordance with the Act, to perform the appellate function established by Parliament.  If, in making proper allowances for the advantages enjoyed by the trial judge, a court or this Full Bench concludes that an error has been shown, then it is authorised and obliged to discharge its appellate duty.  If there are incontrovertible facts or uncontested testimony which demonstrate that the conclusions of the Commission at first instance are erroneous, even when they appear to be or are based on credibility findings, then a Full Bench is required to perform the functions conferred on it by the Act (see Gleeson CJ, Gummow and Kirby JJ in Fox v Percy (HC) (op cit) at pages 128-129).

240   The rule in Warren v Coombes and Another [1978-1979] 142 CLR 531, as Their Honours also said in Fox v Percy (HC) (op cit), is “not only sound in law but, beneficial in ….. operation”.  That rule is expressed at page 551 as follows:-

 “…. in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it.”

241   The substance of the submissions for the appellant was that Mr Brandis had an expectation of employment and that expectation was legitimate.

242   I agree with the submission by Mr Schapper that the process of a selection may be unfair, even though the selection process might have been fair.  It follows, too, that the refusal to employ may be unfair.  However, it is not of much assistance to make that distinction.  The decision was either unfair or it was not, whatever the reason therefor might be.

243   Mr Brandis, as I have said, was one of a number of applicants for the position of permanent locomotive driver, some of whom in the end were selected for interview, and some of whom were not.  He was selected for interview.  He was interviewed.  He was not selected for the position after he was interviewed, for three reasons.  First, it was because he had a poor safety record.  Second, it was because of his referees or poor or ambiguous opinions of him given by them.  Third, he underwent a psychometric test and the result was an unfavourable one for him.

244   As it was submitted, and as was the undisputed fact, he was a very competent driver with over 25 years experience.  He had driven for BHPB for many years.  He returned after some time through IW.  Mr Gibbons said that he was one of the best operators whom Mr Gibbons had seen.  Mr Gibbons’ pass out assessment of him, that is after the induction, was very good too.  Neither Mr Gibbons nor any other BHPB employee had anything but praise for Mr Brandis, on the evidence.  When he returned through IW to work for BHPB, there was nothing then suggested which would bar him from employment.

245   What was raised in his references occurred well after the event and as justification for his not being employed on a permanent basis.  Of course, in considering this question, I put aside the fact that he was employed on a permanent basis.

246   The reference which Mr Holland provided for IW was that Mr Brandis’ job skills were excellent and that his overall performance was very good.  All of these references were provided before his application for the job at BHPB.

247   The August 2002 incident was, as I have said, a serious incident, but it was not regarded by BHPB as serious enough to warrant dismissal, only suspension for two tours.  He continued to drive trains without any evidence of any other incident after that, and, indeed, to train other drivers who were selected and granted employment by the process which denied him employment.  He was still employed driving trains with BHPB at the date of the hearing and continuing.  There was no evidence that there was any intention to terminate his employment.

248   On Mr Jolly’s own evidence, BHPB has to and does apply the highest safety standards and it only employs people who are fit and confident to operate this machinery in a safe way.  It is clear in these cases that such a driver is often in charge of several locomotives and thousands of tonnes of load and up to 300 units of rolling stock.

249   The only people whom BHPB employs to operate its machines are people of the standard to which I have just referred.  Mr Jolly said unequivocally that if BHPB had any concerns at all that a person was a danger and not able to meet the company’s high standards, then the company would have to remove that person from operating these trains.  Sometimes the person might be removed and retrained.  It clearly follows that other persons might be removed altogether.  It clearly follows, too, that Mr Brandis did meet BHPB’s high standards because apart from the serious incident in August 2002 he was a driver of high standard on the comments about him, to which I have referred above, and must have, after that incident, continued to be.  Thus, he was accepted by BHPB as an entirely safe and skilled driver, notwithstanding the incident of August 2002.

250   Further, his safety record was sufficient to enable him to be employed for over three years, allegedly through IW, so that there was no real obstacle from that point of view to his being directly employed by BHPB.  It was therefore unfair to allow him to work for two years after a serious “incident” and then to say that he was unfit for employment on the basis of his safety record, when he was employed, in any event, on a long term basis, and, indeed, employed in training the new employees.  Such evidence is, as Mr Schapper submitted, neither logical, nor is it credible.

251   The Commissioner at first instance found that it was not logical to approach the matter on the basis that, because he was an experienced and competent driver and therefore an experienced driver he ought to be employed (see paragraph 40 of the reasons for decision at first instance).

252   I agree that there is some flaw in that reasoning.  There are, of course, many reasons why a “contractor” may fairly not be offered employment which may not have anything to do with his competence or incompetence.

253   Next, it is, I agree, not an answer to say that Mr Brandis was fairly refused employment because otherwise there were a number of others who might make the same claim.  There was, however, in any event, no evidence that there were any such persons.  The only evidence was that he was a person, an experienced and generally highly commended driver.

254   It was submitted that the argument was that a decision not to employ based on the safety record was unfair because of his lack of substantial record of unsafe work, and because he was continuing in employment without any unsafe conduct.  Further, there was no suggestion that he should not be employed.

255   What is, of course, most to the point is that there is no evidence that there was any driver more competent or more experienced or of the same or higher standard as an operator as Mr Brandis’ references whom I have mentioned above described.  Not the least was the reference I have mentioned from Mr Gibbons.

256   There was no credible or valid basis to refuse his application for those reasons.  It was accordingly not fair to refuse it for such a specious reason.

257   There were two referees, Mr Hudson and Mr Gibbons.

258   Mr Craig Hudson of IW gave a verbal “reference” to Ms Rayner about Mr Brandis.  Mr Brandis’ safety record was impugned again only on the basis of the August 2002 incident, and on no other basis.  Mr Hudson also, somewhat belatedly, described Mr Brandis as abrasive and said that he was not a team player.  To condemn him in the reference because of that was simply not a tenable approach for the reasons which I have expressed above.  It is not a basis which is fair or valid for refusing to employ him.

259   Mr Hudson also gave him a poor reference because (see pages 62-74 of the transcript at first instance) BHPB directed IW unilaterally and without consulting Mr Brandis to reduce his rate of pay if he were working on work trains, and Mr Brandis protested about it.

260   Mr Brandis objected and was engaged in various discussions about this issue with BHPB and IW both.  Because no agreement was reached, Mr Brandis took the matter to the Employment Advocate who ruled that Mr Brandis was correct.  He was then back paid the amount which he claimed should have been paid to him, an amount contributed half and half by BHPB and IW.  It was correctly submitted that Mr Hudson gave Mr Brandis a poor reference based on this incident, in particular because the other drivers accepted the reduction unilaterally forced upon them and he did not.  It was submitted entirely correctly that Mr Brandis was entitled to dispute the unilateral reduction of his pay.  There should not have been a unilateral reduction.  What he did was to pursue it properly through discussions with both BHPB and IW and then when the matter could not be resolved by such discussions took it to the Employment Advocate who resolved it in his favour.

261   Mr Brandis dealt with the matter properly and was right.  If he had not done so he would have wrongfully been deprived of his proper entitlement to wages.  That Mr Hudson presented a reference which used that incident to criticise and condemn him for asserting his rights and having them vindicated is extraordinary and entirely unfair.  It should not have been at all advanced as a basis to reject his application for permanent employment because he stood up for his rights and was right.  In giving such a reference Mr Hudson acted unfairly, and in acting on it BHPB was wrong and manifestly unfair.  In all of the circumstances, BHPB could not, in all fairness, refuse to employ him because he did not except a unilateral reduction of his pay, which was wrong.  That they did so constituted serious unfairness.

262   The next criticism of him was that he had refused to work on a tour over Christmas.  It was not controverted in evidence that he informed BHPB in about September/October 2003 that he intended to take unpaid leave at Christmas time because he had made arrangements to meet family members coming from South Africa.  He assumed that that was an end of the matter and made his arrangements accordingly.

263   In November 2003, BHPB attempted to compel him to work during that period.  He refused because he had made arrangements with his family to be with them when they came to Australia, explaining that he had given plenty of notice.  He offered to work three shifts because he could not work a full tour, but this offer was rejected.  This episode contained nothing which should justify a poor reference.  It was one simple isolated episode and all it constituted was an admission that BHPB regarded it as a matter in relation to which it should unilaterally deal with him without any reference to IW, and that was consistent with it being his employer.  However, it was entirely unfair because he had acted correctly by giving more than adequate notice and was then put under pressure to work when he should not have been.  To use this against him was also unfair.

264   Another criticism was expressed by Mr Gibbons in his reference, and it was a verbal reference given to Ms Rayner.  Mr Gibbons referred back to 1998 to an incident which merited no action at the time, and was not raised as any objection to his employment, nor was he disciplined or dismissed for it.  Mr Gibbons himself commended Mr Brandis when he returned to work, allegedly via IW, and he did not use it as any element to fail him in his induction.  As to the incident itself, there was an inspector, or loco crew foreman, present at the time who made no mention of the alleged poor train handling causing a braking of the train.  Mr Gibbons’ evidence, in the face of his unreserved condemnation of Mr Brandis earlier as one of the best operators whom he had seen and that his greatest strength included his operating skills, was simply not credible.  There was no evidence either to support Mr Gibbons’ allegation that in 1998 Mr Brandis told him that he, Mr Brandis, had overridden an ATP for an entire journey from Newman to Nelson.  All of these events occurred, in any event, seven years before.  Mr Gibbons, if it did occur, never reported it.  Mr Brandis denied it, and it also was not raised at the time of his re-engagement in June 2001.  Again, this is simply not credible in the light of the earlier evidence and Mr Gibbons’ view of his capacity.

265   None of these references were credible or reliable, not the least because Mr Brandis remained working for BHPB at the time of the hearing, and there was no suggestion by any of the witnesses that they wished him removed for negligence, incompetence or any other omission, or that it was intended to dismiss him.  There was no indication either that they intended to remove him pursuant to any alleged rights to remove employees of IW.

266   It was wrong and unfair of BHPB to rely on these references as bases for a refusal to employ Mr Brandis.

267   Again, there is an element of deceit in this because Mr Brandis named these persons as referees, and yet they did not forewarn him when had asked them to be his referees that their references would be detrimental to him.  Had he known that, no doubt, he could have decided whether he wished to pursue their references to assist him in his application.

268   Again, also, the situation is quite peculiar.  Mr Brandis was, at all times during his employment by BHPB and after 2001, purportedly when employed by IW, never dismissed for incompetence and/or unsafe working, never disciplined except for the August 2002 event, and remained working at BHPB and after the time of the “refusal of employment” by BHPB.  Mr Brandis was “retained” by Mr Hudson, who condemned him, as IW’s “employee” with BHPB, even though Mr Hudson gave him an adverse reference.  Furthermore, Mr Brandis was hired by IW on the basis of Mr Holland’s references, praised by Mr Gibbons, subject to Mr Holland’s comment that his job skills were excellent and his overall performance was very good, lightly disciplined by BHPB years ago with reference, inter alia, to his honesty in admitting that he had done wrong, by Mr Holland and Mr Ireland, in relation to an incident investigated by Mr Holland.

269   Further, Mr Gibbons passed him as competent and had no complaint about his engagement in 2001 and never complained about him at any other time on the record.  Quite the contrary.

270   All of the evidence of the referees was entirely unsatisfactory and in part self-contradictory and no basis for any fair refusal to employ a man who was deemed safe and satisfactory to employ with all others.  The references simply lacked credibility.  To rely on them was unfair given that they are not in accordance either with the objective facts.

271   The next basis of the refusal to employ Mr Brandis was the result of a psychometric test conducted by a psychologist (see tab 2 (AB), volume 2, RMR6).  There is no evidence that the psychologist knew that Mr Brandis had been an engine driver for many years or of what, if any, personal engagement the psychologist had with Mr Brandis before making the assessment.  The conclusion to the report was that “Mr Brandis is not recommended for employment in the position of Rail Transport Technician given he does not have an appropriate level of problem solving and learning capacity and will find that his decisions are rules (sic) more by his emotions and training than the evidence at hand”.

272   That assessment was entirely wrong because Mr Brandis has successfully operated the trains for BHPB on the railways for many years, and was doing so at the time of the report and after it.  Curiously the report had no effect on his purported employment with IW because he continued to drive locomotives, even after it was received, and it seems to have been used against him only in relation to his application for permanent employment so called.  He was continuing to drive locomotives at the time of the hearing at first instance.

273   In June 2001 he had been assessed as very competent and his references before the references relating to his application for a job were laudatory.

274   It is difficult to understand how a competent engine driver who had driven locomotives for many years and who remained in employment training the newly selected officers and who had inferably and inevitably, one would suggest, dealt with changes in plant, machinery and procedures over that period, could have been so erroneously assessed as he was.

275   Ms Rayner and other members of the selection panel did not query this assessment, notwithstanding their knowledge of the man’s experience and notwithstanding that Mr Jolly, in particular, was high in his praise of him before these events.  They all knew his capacity or ought to have known of it, and they all ought to have known that such a psychometric assessment was palpably wrong.  It is very difficult to understand how this occurred.  The selection process was unfair in that it allowed a psychometric assessment to overrule the objective facts and to constitute part of the reasons for refusing to employ him.

276   I now make some observations directed to the submissions for the respondent on this ground.  In this case, Commissioner Wood did apply the wrong test in that he held that, to make a case for refusal to employ, “then the applicant has to pass a relatively high hurdle to warrant the intervention of the Commission so as to order the employer to recruit a particular person” (paragraph 40 of his reasons).  The selection process was comprehensive and the selection panel of three members made the decision.  The Commissioner found that he did not detect any sense of bias in the selection process which was described as a multi-faceted selection process.

277   The Commissioner was required to determine the matter in accordance with s26(1)(a) of the Act, and not to raise a higher hurdle than that, and he found that the panel agreed on the ratings of each short-listed applicant of whom Mr Brandis was one, on each of the components of the multi-faceted selection.  One component alone did not determine the outcome, the Commissioner found and, in particular, not the psychometric test.  All of the components of the selection process were taken into account, he found.  It was submitted, too, that there was no evidence to justify going behind the score given to Mr Brandis or to understand it better.  It was also submitted that, because of his low comparative score from his first interview, he may have been excluded properly from the process but he was treated fairly in that he was still, notwithstanding the low score, taken through the whole selection process.

278   The panel, who were cross-examined, Ms Rayner, Mr Jolly and Mr Holland, gave evidence that the testing was confirmatory, at least in part, of impressions which they had formed of Mr Brandis.  Mr Gibbons, a rail transport supervisor, also gave evidence.  His evidence was that, inter alia, he had told Ms Rayner that he would employ Mr Brandis as a driver subject to conditions and his evidence in that regard was not shaken, the Commissioner found.  However, his earlier description of Mr Brandis’ ability in glowing terms and his silence when Mr Brandis returned to work for BHPB in 2001 about any flaws in Mr Brandis’ work performance of which he later complained in his “reference”, were in contradiction of what he said to Ms Rayner.

279   Whilst the selection panel was entitled to take account of the comments of the referees, Mr Holland and Mr Jolly knew Mr Brandis’ ability and continued to use him or allow him to be used to train new driver recruits who were selected instead of him.  Further, they continued to employ Mr Brandis with no talk of his being dismissed after the selection process was completed.  Thus, the comments could not, in fairness, be taken at face value and should not have been by the panel.  Further, Mr Hudson’s report should not have been, in fairness, taken at face value, the Commissioner having found that Mr Hudson’s criticism was inappropriate.  It was not only inappropriate, and the Commissioner should have so found, it was inaccurate.  The selection panel should have gone behind that also.

280   There was reference to Mr Brandis’ performance at interview in relation to which he was given low scores.  However, I think that of little consequence in the light of his experience and good performance over a number of years which was well known to at least two members of the panel, or ought to have been.  In my opinion, in this case, the Commission misused its advantage in finding that the rejection of Mr Brandis’ application was not established to be unfair.  It was open to find and it should have been found that the selection panel acted incorrectly and unfairly in assessing Mr Brandis as they did and acted unfairly in relying on the “references”, so called, and on the psychiatric report.  The Commissioner placed credence in their evidence when he should not have.

281   There was an error in that the Commissioner made these findings and that these findings flew in the face of objective, uncontroverted and, in part, uncontested evidence of Mr Jolly’s own knowledge of Mr Brandis and his commendatory remarks about his ability, Mr Gibbons’ fulsome commendation of him previously, Mr Brandis’ good safety record except for the isolated incident of August 2002, his selection by the very people who did not select him, or at least one of them, to train the successful candidates for employment, his lengthy employment by BHPB over years, and his own years of experience.  Further, there was the incontrovertible fact that he was deemed “suitable for employment” for three years in BHPB’s system and remained in such employment even after he was not selected by the interview panel for the job which he mistakenly applied for.

282   The Commissioner at first instance did err in holding that it was reasonably open to BHPB to come to the decision not to employ Mr Brandis, because the reasons for refusing to employ him, an experienced driver, were quite without merit.  The selection system was unfair because Mr Brandis’ application was rejected on invalid and implausible or improbable grounds.  The result achieved was entirely unfair.  Further, that he had worked on a continuing basis and not as a casual for three years, or the best part of three years, and was deemed suitable to continue to work and to demonstrate the system to those were selected instead of him is proof of a thorough unfairness of the process as a result.  The Commissioner erred in failing to so find.

283   The decision not to employ Mr Brandis was one, I must infer, because of those facts, made ineptly or unfairly and an injustice was done to him.  Alternatively, it was made with ill will for Mr Brandis, perhaps relating to his propensity to stand up for his rights, if one were to infer the worst against BHPB.  The Commissioner misused his advantage in seeing the witnesses.  I would find, and it should have been found, that Mr Brandis was, applying s26(1)(a) of the Act and, having regard to s26(1)(c), treated thoroughly unfairly and it is his interest which must prevail over that of BHPB or IW, and that such unfairness must be remedied as he seeks that it be done.

284   The exercise of the discretion miscarried because the Commissioner mistook the facts, for the reasons which I have expressed, and allowed some irrelevant matters to guide him whilst not taking account of some relevant matters.  As a result, the exercise of the discretion referred to in ground 3 miscarried and the Full Bench is enabled to substitute the exercise of its own discretion for the exercise of the discretion at first instance.  I would do so, relying on the findings which I say should have been made at first instance, as well as any other relevant unchallenged findings.

285   Further and alternatively, Mr Brandis was, at all material times, an employee of BHPB.  He patently therefore did not have to apply for a job which he already held, and the selection process was simply invalid and irrelevant to his employment situation.

FINALLY

286   For all of those reasons, the appellant has established that the exercise of the discretion at first instance miscarried.  Further, the submission that no appealable error was established within the principles laid down in House v The King (HC) (op cit) is not made out.  Next and alternatively, the selection process was invalid and Mr Brandis should never have been required to apply for a position which he already held, namely an ongoing and continuous position as a locomotive driver and an employee of BHPB.

287   Accordingly, I would make the findings which I say above should have been made.  I find that the Full Bench should exercise its discretion to order that Mr Brandis continue to be employed as and from 7 May 2004, and declare that the award applied to Mr Brandis’ employment at all material times (7 May 2004 was the date when Mr Brandis’ application for employment was refused (see tab 6, page 102 (AB), volume 1)).  I am not persuaded that this Commission, in the circumstances of this case, has the power or perhaps the jurisdiction, in the face of the Workplace Relations Act 1996 (Cth), Part VID, to order that Mr Brandis be employed subject to any award, or, indeed, any AWA.  I would also, in the alternative, order that Mr Brandis be employed by BHPB as and from 7 May 2004.  I am not of the opinion that RRIA v AWU (1987) 67 WAIG 320 prevents a declaration in isolation being made.  Brinsden J says so, but Kennedy J says otherwise and the Full Bench has decided otherwise in a number of cases.  In this case, however, an isolated declaration is not sought but a declaration or declarations are sought or necessary to accompany a substantive order or orders.

288   I would therefore, in making such declaration and orders, uphold the appeal and vary the orders made at first instance accordingly.

289   I would issue a Minute of Proposed Order to reflect the reasons for decision of the Full Bench.

CHIEF COMMISSIONER A R BEECH:

290   By the first ground of appeal it is alleged the Commission erred in holding that there was not a contract of employment between Mr Brandis and BHPB.  The Appellant urges the Full Bench to find there was such an employment relationship either between Mr Brandis and BHPB or between Mr Brandis and both BHPB and IW.

291   The Commission is being increasingly asked to deal with claims relating to employees who obtain their work through an employment agency.  There may be many different forms of engagement between the employee and the employment agency.  In some cases an employment agency may merely introduce a prospective employee to a prospective employer.  In other cases the agency may enter into an agreement with the worker and arrange to hire out their services to a third party, the client.  There also may well be a contract between the agency and the client.  So it is here.

292   The facts of the matter, and the findings of the Commission at first instance have been set out in the Reasons for Decision of His Honour the President and there is no need to repeat them here.  Of those facts, as correctly found by the Commission at first instance, Mr Brandis was party to an AWA with IW which identified them as employer and employee.  Relevantly, Special Condition 9 of the contract between IW and BHPB provides that neither IW, nor the drivers supplied by IW shall be employees of BHPB for any purpose.

293   I pause to note, as His Honour has observed, that the contract between IW and BHPB had expired.  This was not the subject of any submissions and was not a matter raised before the Commission at first instance.  The matter at first instance, and this appeal, have both been argued on the implicit basis that the contract between IW and BHPB continued in existence.  When parties make an express contract to last for a fixed term and continue to act as though the contract still bound them after the term has expired it is open to the Commission to infer that the parties have agreed to renew the express contract for another term:  Chitty on Contracts, Sweet & Maxwell, London, 29th edition, Volume 2, paragraph 1-066. 

294   I consider that inference duly arises on the facts in this case.  The evidence suggests that IW and BHPB merely continued as though it was still in existence, for example the evidence of Mr Hudson (AB2 tab 1 at [19]) is of a meeting in June 2004 between him and BHPB to discuss “various ongoing operational matters”; further the fact that BHPB continued to pay IW the payment due under that agreement is strongly supportive of that inference.

295   It was not submitted that the contract between Mr Brandis and IW is a sham.  I find that it was not a sham as that word was considered by Merkel J in Damevski v Giudice (2003) 202 ALR 494 at [139].  Nevertheless the designation in the AWA of Mr Brandis as an employee and IW as the employer, and SC 9 just referred to in the special conditions of contract between IW and BHPB, are not determinative of whether Mr Brandis was in law an employee of BHPB.  Where the parties have defined their relationship by a clause in a contract made between them that clause will be given weight (if it is not a sham) although it will not be determinative (Personnel Contracting Pty Ltd t/as Tricord Personnel v CFMEU (“Tricord”) (2004) 85 WAIG 5 per Steytler J at [24]; it is the substance of the relationship not its form, still less declarations or labels which the parties themselves may attempt to place on their relationship, which is determinative: per EM Heenan J at [52]; the language of the contract is relevant in determining what rights and obligations the parties created for themselves: per Simmonds J at [139]).

296   The question whether Mr Brandis was an employee of BHPB is not wholly answered by saying that he was employed by IW.  The decision of the United Kingdom Court of Appeal in Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA Civ 217 considered the situation where a cleaner who worked for some years in a Council-owned mental health hostel was engaged through an employment agency.  While the circumstances of that appeal meant that the question whether there was an employment relationship between the cleaner and the Council was not able to be directly considered, Mummery and Selby LJJ  considered that the evidence pointed to the conclusion that the cleaner worked under an implied contract of service with the Council; Munby LJ considered that facts could not lead to such a conclusion in law because there can only be an employment relationship if the Council is responsible for the payment of the remuneration to the cleaner. 

297   The triangular or trilateral nature of the relationship was recognised by all the members of the Court of Appeal.  Significantly, all three members expressed the view that when an employment tribunal deals with cases where a person has a contract with a labour hire agency to work in the premises of the client of that agency the tribunal should not determine the status of the person without also considering the possibility of an implied contract of service between the person and the client and making findings of fact relevant to that issue.  I respectfully endorse that view for matters of this nature which come before this Commission; although the decision in Brook Street is not part of Australian law it applies the common law to the complex issues arising from the engagement of labour through a labour hire agency.  The tripartite nature of such situations has been recognised in by the Federal Court in Damevski v. Giudice op. cit. per Merkel J at [147] where, on the facts in that case, an employment relationship between the worker and the client of the labour hire agency was determined to exist.

298   In my view, when an employment situation comes before the Commission involving a worker engaged (to use a neutral term) by a labour hire agency to perform work in the premises of a client of the agency, the Commission should consider the possibility of an implied contract of service between the worker and the client and make findings of fact relevant to that issue.

299   Whether there was a contract of service between Mr Brandis and BHPB as alleged in the first ground of appeal will therefore necessitate a consideration of all the circumstances.  Dealings between parties over a period of years, as distinct from the weeks or months typical of temporary or casual work, are capable of generating an implied contractual relationship (Franks v Reuters [2003] IRLR 424).  Express and implied contracts are both contracts in the true sense of the term for they both arise from the agreement of the parties although in one case the agreement is manifested in words and in the other case by conduct (Chitty on Contracts, supra).  It is necessary to properly apply established principles of contract law and address, after considering all of the relevant evidence, whether there was a contract which could be implied based upon the conduct of the parties: Damevski v Giudice (2003) 202 ALR 494 op.cit. per Marshall J at [81].

300   In this matter there is no documentary evidence of an agreement between Mr Brandis and BHPB.  However, a contract may be implied by concluding after examining extrinsic evidence, including what the parties said and did, that the parties intended to create contractual relations (ibid).  On that authority, documentary evidence of an offer from BHPB to re-employ Mr Brandis, and a signed acceptance by him of it, is unnecessary.  Marshall J noted (at [84] and following) the authorities that an agreement may be inferred from conduct alone.  The issue therefore will be whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows the necessary tacit understanding or agreement capable of proving all of the essential elements of contract. 

301   When Mr Brandis returned to work at BHPB in 2001 he did so after having applied for work at IW because he knew they were supplying contract drivers to BHPB (AB1, tab 6, paragraph 4).  The offer  to work on BHPB’s site was made by IW; the work performed by Mr Brandis on BHPB’s site was not as a result of any separate offer from BHPB to Mr Brandis (c.f. Swift Placements Pty Ltd v Workcover Authority of NSW (2000) 96 IR 69 at [38], [44]). 

302   His evidence is that he attended a BHPB training course in Perth and was flown by BHPB to Newman for a site induction for various tests.  However Mr Hudson’s statement is that the training course was an IW course and  IW paid Mr Brandis’s wages.  IW enlisted the services of BHPB staff to deliver some of the training at the course.  I note also the evidence of Mr Jolly that BHPB does provide IW drivers with training and that BHPB reviews the list of drivers provided by IW and makes selections of those who seem best suited in terms of training and experience.  The evidence of this initial contact shows that Mr Brandis was dealing more with IW than with BHPB.

303   IW then put Mr Brandis’s name forward to BHPB as a suitable driver.  In my view the selection of Mr Brandis by BHPB, which implicitly carries the right of BHPB to reject a driver offered by IW, is conduct which, objectively, evinces an intention by BHPB to have a direct relationship with that driver: not just with any driver supplied by IW, but with the particular driver concerned.  Its evident intention to maintain control over who operate its trains on its railway and the manner in which a particular driver will observe its operating rules and procedures, including the detail of how the driver will drive its locomotive to conserve fuel, and having the power to have the driver disciplined for transgressing its operating rules and procedures, and in turn Mr Brandis’s working under that level of BHPB’s control, is all conduct strongly suggestive of a relationship directly between BHPB and Mr Brandis. 

304   The extent to which BHPB exercised control over the work of Mr Brandis, including its actual exercise and the right of BHPB to exercise it was emphasised by Mr Schapper and properly so.  Mr Brandis was integrated into the operations of BHPB: AB1 Tab 6, page 35, and the evidence of Mr Jolly at TFI 148 and of Mr Hudson at TFI 52, 53.  The only visible difference to his employment appears to be that in the latter stages of the continuity of his employment, he wore a uniform supplied by IW and bearing its logo; in the early stages he wore a BHPB uniform. 

305   When the issue to be determined is whether the contract between a worker and a putative employer is a contract of service or a contract for services, control remains a prominent factor: Tricord, citing Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 24.  As the Reasons for Decision of His Honour the President have pointed out in great detail, BHPB exercised significant control over Mr Brandis’ work.  It is noteworthy that not only did BHPB set the rosters he worked it also required him to drive the locomotive in a certain manner to maximise the potential to conserve fuel and even to put the locomotive into idle during a downpour.  BHPB not only exercised that level of control, it had the right to exercise that level of control: Special Condition 1 in the contract between BHPB and IW made IW responsible for the provision of competent locomotive driving services as required by BHPB; in turn, the AWA between Mr Brandis and IW obliged Mr Brandis to observe BHPB’s operating rules and conditions. 

306   The degree of that control was a term of the employment relationship with IW.  BHPB would exercise the day-to-day control over Mr Brandis and, conversely, IW would exercise little, if any day-to-day control over him and his work.  IW regards day-to-day supervision as part of the “operational matters for which BHPB is responsible (Evidence of Mr Hudson, AB2 tab 1 at [20]).  Even though IW has its own occupational health and safety policy and Mr Brandis was trained on this as part of his induction that evidence does not show that IW exercised, or could exercise, day-to-day control over Mr Brandis when he worked on BHPB’s railway.

307   The facts of this case reveal a greater degree of control of Mr Brandis by BHPB than merely the work to be done and the manner it was to be performed.  The areas where this occurred have been set out in the Reasons for Decision of His Honour and I do not repeat them here.  It is significant, in my view, that BHPB believed it could reduce the wage paid by IW to Mr Brandis for operating work trains; IW considered its role was merely as a conduit between BHPB and Mr Brandis (TFI 67-67a);  he was invited along with other BHPB drivers to participate with them in the healthy lifestyle programme and to attend meetings with BHPB with other staff drivers; BHPB, and not IW, not only investigated the incident in 2002 but BHPB managers solely determined the discipline to be administered to Mr Brandis and told him he would be suspended.  IW formally notified Mr Brandis of this however this latter point is to be considered in the context that there was little else IW could do given the obligation arising from Clause 26.6 of the General Conditions of Contract between IW and BHPB (that IW shall comply with BHPB’s industrial relations directions) and IW’s view that such matters are “operational matters” which come within the authority of BHPB (TFI p.53). 

308   It is also relevant to note that Mr Brandis worked solely at the premises of BHPB.  This is not a case where the agency worker works at a number of different premises.  Thus, Mr Brandis was subject to this degree of control continuously between June 2001 and September 2004.  Although the length of the employment period is not of itself a factor of great significance, where the engagement is for a long or indefinite period the application of the control test to a vicarious employment relationship is more likely to lead to the conclusion that whatever the terms of the agreement between the temporary employee and the agency, the hirer of the labour would be held to be the true employer (The Law of Employment,  Macken et al., Law Book Company, 5th edition 2002 at page 51). 

309   The “ultimate” control to terminate the employment of Mr Brandis with one hour’s notice (AWA Clause 3.3) was with IW.  BHPB did not have the right to dismiss Mr Brandis.  In Clause 25 of the General Conditions of Contract BHPB may direct IW to have removed from site or from any activity connected with the work under the contract any subcontractor or person employed in connection with the work under the contract and the contractor is to immediately comply with the direction and “shall not re-employ or commit any such person so dismissed to be re-employed in or in connection with the performance of the work under the contract without the prior approval of BHPB”.  BHPB also had the right at any time, for any reason, to terminate by written notice any part, or the whole, of the work under the contract (Clause 41 of the General Conditions of Contract).  This would then oblige IW to cease the work and comply with any directions by BHPB including demobilizing from the site IW’s personnel. 

310   BHPB therefore had the means to effectively dismiss, but not lawfully dismiss, Mr Brandis.  It had the right to effectively dismiss him because the contract between Mr Brandis and IW is for work on BHPB’s sites; upon BHPB obliging IW to remove him from site there is no obligation on IW to place Mr Brandis in any other paid employment.  In effect, BHPB will have caused Mr Brandis’s dismissal.  BHPB argues that in such a situation it does not follow that BHPB is terminating a contractual arrangement between it and Mr Brandis.  However, that begs the question of whether there was, or was not, a contractual arrangement between BHPB and Mr Brandis. 

311   BHPB submitted that it had an obligation to direct Mr Brandis in his work by virtue of the Mines Safety and Inspection Act, 1994.  However, it is difficult to see how the control exercised by BHPB in relation to, for example, driving a locomotive according to a certain roster or in a certain manner so as to conserve fuel, or returning the locomotive to idle during a downpour, is an example of control exercised by BHPB over the work of Mr Brandis arising by virtue of that legislation.  

312   The issue of control has been held not to be determinative in cases where there is a triangular relationship between a worker, a labour hire agency and its client, as McDougall J observed in Forstaff & Ors v The Chief Commissioner of State Revenue [2004] NSWSC 573 at [114].  Control is still only one issue to be considered.  Nevertheless, if ground 1 was to be resolved only on the basis of the proper application of the control test I would conclude that if there was a contract between them, the conduct of Mr Brandis and BHPB resulted in the contract being one of service and not for services. 

313   However, the issue is really whether there was an implied contract at all between Mr Brandis and BHPB.  Whether there was an implied contract between Mr Brandis and BHPB based upon the conduct of the parties proving all of the essential elements of the contract  cannot overlook the evidence that Mr Brandis applied to be employed by BHPB.  That is conduct on his part which is directly contrary to any implication of a contract existing between them.  Correspondingly, the evidence is that BHPB refused him employment and that, in turn, is conduct which is directly contrary to any objective implication that a contract existed between it and Mr Brandis. 

314   While the conduct of Mr Brandis on the one part, and of BHPB on the other, is not determinative, it is a factor which the law takes into account in determining whether a contract exists.  It is evidence of what they said and did about whether they had created contractual relations.  Admissions may provide material from which a court may find a question of law, a question of fact, or a question being a conclusion from a mixture of fact or law: Pitcher v Langford (1991) 23 NSWLR at 160.  It is difficult to imply from the conduct of Mr Brandis and BHPB that a contract existed between them when on that central point their conduct was the exact opposite of the implication that there was.  It is upon that evidence that this ground must fail. 

315   I note too the conclusion of the Commission at first instance that there was no mutuality of obligation necessary for the implication of a contract of service between Mr Brandis and BHPB.  I consider he was quite correct to so hold.  He referred to Mr Brandis’ evidence that his salary was paid by IW.  This accords with IW’s statutory obligation under the AWA between Mr Brandis and IW and also the agreement between IW and BHPB.  The remuneration also includes IW having paid, and having the obligation to pay, superannuation and workers compensation entitlements.  The rate of remuneration is specified in the AWA.  The evidence is that IW was obliged to pay Mr Brandis for all hours worked subject only to IW receiving a BHPB timesheet correctly completed and with the appropriate authorisation by an approved supervisor; IW paying Mr Brandis was not dependant upon BHPB first paying IW. 

316   Conversely, there is no evidence that BHPB made any payments to Mr Brandis.  The most that can be said is the reservation in BHPB in the General Conditions of Contract Clause 37 to make payments to workers or to subcontractors upon termination for default, insolvency, or for convenience in the event that the company has no reasonable alternative for industrial relations or commercial reasons to make those payments.  In those circumstances the payment is set-off or otherwise recovered from the contractor. 

317   It was submitted by Mr Schapper that BHPB had the power under Clause 26.6 of the General conditions of Contract to direct IW to request BHPB to pay Mr Brandis’s wages to him directly.  Clause 26.6(b) does not speak in those terms; it does oblige IW to comply with BHPB’s industrial relations directions although there is no suggestion that BHPB ever paid Mr Brandis’s wages directly and the evidence is that Mr Brandis’s wages were only paid by IW.

318   He also submitted that the fact that IW paid Mr Brandis’s wages necessarily neither makes IW the employer nor does it mean that BHPB is not the employer.  As I understand the law the payment of wages by a third party, or intermediary, is not fatal to the existence of a contract of employment between a worker and a presumptive employer; the essential enquiry is whether the presumptive employer remains liable to pay the worker if the third party or intermediary fails to do so (Building Workers' Industrial Union of Australia v. Odco Pty Ltd (1991) 37 IR 380 at 392)(“Odco”).  Where the employer contracts out a payroll service it does so by having the payroll service pay the employee from the employer’s money; the employer remains liable to pay the wages in the event that the payroll service fails to pay it.  There is no contract between the employee and the payroll service and the payroll service’s obligation to pay depends upon the employer making the funds available to the payroll service.

319   Embarking upon that enquiry here, the AWA in clause 6 obliges IW to pay Mr Brandis the rate of pay specified for all hours worked.  IW remains liable for that payment.  IW and Mr Brandis agreed on the rate of wage and what it did, or did not comprehend within it.  There is nothing to support a conclusion that BHPB remains liable to pay Mr Brandis if IW fails to do so. 

320   Conversely, and as was submitted on behalf of BHPB, there was no promise of payment to Mr Brandis by BHPB; no agreement between BHPB and Mr Brandis as to what sum was to be paid (indeed, I observe that on one occasion regarding work trains there was a disagreement on the part of BHPB and Mr Brandis as to what sum was to be paid) and only an entitlement on the part of Mr Brandis to receive payment from IW. 

321   By clause 37 of the General Conditions of Contract BHPB may have withheld further payment to IW subject to proof that Mr Brandis’s wages had been paid by IW but that is not the same as giving BHPB the right to pay Mr Brandis’s wages or, conversely the right to Mr Brandis to claim payment from BHPB (c.f Forstaff op. cit. at [99]), this being the factor which led the Commission at first instance to conclude that there was not a necessary mutuality of obligations between Mr Brandis and BHPB. 

322   Here the submission was that IW is merely a conduit between Mr Brandis and BHPB.  In Odco the Full Court considered whether the labour hire agency in that case may have been acting as the agent for the principal in procuring the services of the workers, or as agents for the workers in finding work.  Of significance was the finding of the Full Court (at 37 IR 392) that the chief objection to that analysis arose from the evidence that it was the agency which fixed, and adjusted from time to time, the remuneration to which the worker was entitled and that this was done apparently without reference to the client who was only concerned to know the gross amount which he was obliged to pay the agency in respect of workers made available by it.  In this case BHPB is directly involved in the rate that IW pays to Mr Brandis.  However, in common with the facts in Odco, IW was liable to pay remuneration at the agreed rate to Mr Brandis whether or not it was itself paid by BHPB. 

323   Ground 1 also raises the argument that in law Mr Brandis was employed jointly by BHPB and IW.  As stated in Brook Street at [19] and [78], it is a possible result of the triangular relationship that there will be more than one entity exercising the functions of an employer, namely the employment agency and the end user jointly.  The recognition in Australia that joint employment is possible is not yet settled (Labour Law, Creighton B and Stewart A, The Federation Press, 2005 at p.283; and see Construction Forestry Mining and Energy Union v Personnel Contracting Pty Ltd t/a Tricord Personnel (FB) (2004) 84 WAIG 1275 per Sharkey P at 1292; Morgan v Kittochside Nominees Pty Ltd (2002) 117 IR 152 at 175).  I consider in common with His Honour, and too, with the Full Bench of the AIRC in Morgan v Kittochside that there appears to be no substantive reason why the common law of employment in Australia cannot recognise a situation can exist where, in the words of Mummery LJ, there will be more than one entity exercising the functions of an employer, namely the employment agency and the end user jointly.

324   I note that His Honour the President reaches the conclusion in this matter that Mr Brandis was jointly employed by BHPB and IW.  I regret that I am unable to reach the same conclusion.  For the reasons I have given, I do not consider the facts permit the implication of a contract between Mr Brandis and BHPB and that conclusion necessarily leads me to the conclusion that BHPB was not an employer of Mr Brandis even jointly with IW.

325   I am unable to conclude that the Commission at first instance erred in holding that Mr Brandis was not employed by BHPB and accordingly I do not consider that ground 1 is made out.  It is therefore not necessary to deal with ground 2.

Ground 3

326   I have had the advantage of reading in draft form the Reasons for Decision of His Honour in relation to this ground.  I agree with the order proposed and I do not wish to add anything. 

COMMISSIONER S J KENNER:

327   I have had the benefit of reading in draft form the reasons for decision of the President in this appeal.  I gratefully adopt his detailed setting out of the background, findings of the Commission at first instance and issues to be determined on this appeal.

Ground 1

328   This ground of appeal asserts that the Commission at first instance erred in holding that Mr Brandis was not an employee of BHP Billiton Iron Ore Pty Ltd (“BHPB”) or alternatively, jointly an employee of BHPB and Integrated Group Ltd trading as Integrated Workforce (“IW”).  It was not in contention between the parties, that Mr Brandis was an employee and was not engaged under some other form of contract.  Counsel for the appellant Mr Schapper, in summary, argued that Mr Brandis was at all material times an employee of BHPB because the lawful authority to and actual control of Mr Brandis was all pervasive.  The appellant submitted that on the facts of this case, the relationship between BHPB and IW was peripheral to the relationship that really existed between BHPB and Mr Brandis and in essence, the only role played by IW was that of a “paymaster”.  For all intents and purposes, IW played no real role at all in relation to the “employment” of Mr Brandis by BHPB, according to the appellant.

329   Alternatively, in reliance upon the decision of the Court of Appeal in Brook Street Bureau (UK) Ltd v Dacas [2004] EWCA, it was submitted that Mr Brandis was party to a contract of service with both BHPB and IW.  Further alternatively, Mr Schapper submitted that for payroll purposes, in effect, IW was BHPB's agent in its dealings with Mr Brandis.

330   On behalf of BHPB, Mr Dixon SC, submitted that at all material times, Mr Brandis was an employee of IW pursuant to a contract of service attached to which, was an Australian Workplace Agreement (“AWA”) registered pursuant to the relevant provisions of the Workplace Relations Act (1996) (Cth) (“the WRA”).  Mr Dixon submitted that on the evidence at first instance, it was clear that Mr Brandis applied for and was offered and he accepted a contract of employment with IW on the terms as set out in the relevant AWA’s in evidence.  Counsel submitted that objectively determined, there was no intention on the part of BHPB and Mr Brandis, to enter into a contract of service at any time.  There were further submissions by Mr Dixon in relation to the nature of the relationship between Mr Brandis and BHPB, the thrust of which was to the effect that the work performed by Mr Brandis, and the various obligations imposed by the contractual arrangements, had as their source Mr Brandis's contract of employment with IW pursuant to the AWA, and not to any express or implied contract of service, with BHPB. 

331   Furthermore, as to control, and in particular occupational health and safety obligations, Mr Dixon submitted that the obligations imposed upon Mr Brandis were, by reason of the nature of the employment at the railroad operations of BHPB, derived from and imposed by State health and safety legislation and the various railroad rules and regulations made by BHPB, that apply to all persons in or about those operations.

332   Counsel for BHPB also submitted that there was no principle of joint employment recognised in Australian law.

333   Counsel for IW, Mr Ellery, generally adopted the submissions of counsel for BHPB, and further said that in Australian law, there was no such thing as a “doctrine of joint employment”.  Furthermore, he submitted that on the evidence adduced at first instance, there was insufficient to establish the requisite elements for a contract of employment between Mr Brandis and BHPB, at any time.  He also submitted that a finding by the Full Bench of joint employment, would introduce undue complexity and confusion between employers and employees.  This was also the submission of Mr Lucev, counsel for the Commonwealth Minister for Workplace Relations, as intervenor.  I must say at this juncture, that I do not find submissions as to complexity or confusion arising from any such findings, as persuasive.  That may well be a consequence of any finding by a court or tribunal, but a court or tribunal, properly addressing itself to the relevant facts and the law, should not shrink from its duty to determine matters properly before them, merely because of the consequences of so doing. 

334   At the outset in dealing with this limb of the appeal, it was never the submission either at first instance or to the Full Bench on this appeal, that the various contractual arrangements entered into between BHPB and IW, and between IW and Mr Brandis, were for the purposes of avoiding any obligations which might arise between either BHPB and Mr Brandis, alternatively between IW and Mr Brandis, or either of them.  That is, there was no suggestion that the arrangements were in any sense “sham” transactions and therefore not binding as executed: Sharrment Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 per Lockhart J at 454.  Furthermore, there was no suggestion either at first instance or on this appeal, that at the time the respective parties entered into the agreements that they did, they did not understand what they were doing, in the sense of any plea of non-est factum: Saunders v Anglia Building Society [1971] AC 1004.  I therefore proceed on the basis that at the material times the various transactions were entered into, the parties intended to make the bargains that they did.   It is also the case in this matter that the contractual documents between the respective parties were clear and unambiguous: cf Damevski v Giudice (2003) 202 ALR 494.

335   Before considering the contract issue, there were also submissions made by counsel for the respondents and the intervenor about the effect of the relevant AWA by reason of, in particular, s 170VQ(4) of the WRA.  These matters were dealt with by the Full Bench in Hanssen Pty Ltd v CFMEU (2004) 84 WAIG 694.  In short, in Hanssen, it was held that the terms of s 170VQ(4) of the WRA do not and could not, extinguish this Commission’s jurisdiction and power to make an award whilst an AWA was extant.  Whether the Commission should do so is a discretionary judgment to be made.  Additionally, an AWA only displaces an award whilst the AWA is in operation, which award would be revived once the AWA ceased to have any effect.  There is no issue of inconsistency that arises for the purposes of s 109 of the Commonwealth Constitution, in this state of affairs.  Nothing was put to the Full Bench on this appeal that causes me to alter the views I expressed in Hanssen and I expressly adhere to them for present purposes.

336   For the appellant to succeed in establishing a contract of employment between BHPB and Mr Brandis, two steps are required to be satisfied.  The first step is to establish that there existed between BHPB and Mr Brandis, at the material times, a contract.  The second step, having established the existence of a contractual relationship, is then to establish that that relationship had the character of employment and not some other character.

337   Many authorities were referred to by counsel in the course of their respective submissions.  I do not intend to refer to all of them for present purposes, however in terms of the first step that is the establishment of a contract, an essential ingredient is the necessity for there to be mutuality of obligation between the parties to it.  This is in essence no more than the requirement that there be consideration passing between the promisee and promisor, in the formation of any contract in contract law parlance.  This requirement for there to be mutuality of obligation has been long recognised.  In the context of employment relations, and the particular difficulties arising in cases where there are labour hire agencies interposed between the end user and the worker, these matters have assumed particular significance.  For example, in Building Workers Industrial Union of Australia and Others v Odco Pty Ltd (1991) 29 FCR 104, the Full Court of the Federal Court (Wilcox, Burchett and Ryan JJ) at 114 said:

“The element of consideration which is essential to a contract of employment is the promise by the presumptive employer to pay for service as and when the service is rendered.  Thus Dixon J observed in Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465:

“A contract for the establishment of the relation of master and servant falls in the same general category of agreements to pay in respect of the consideration when and so often as it is executed, and is, therefore, commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master’s wrongful act.

It is, of course, possible for the parties to make a contract for the payment of periodical sums by the master to the servant independently of his service.  Indeed that is, in effect, what the Duke of Westminster persuaded the majority of the House of Lords he had done in Inland Revenue Commissioners v Duke of Westminster [1936] AC 1.  But, to say the least, it is not usual.  The common understand of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stands by his contract and declines to treat it as discharged by breach”

In this case, on the evidence, there was no promise of payment of periodical sums by the builder to the worker, and no argument between the builder and the worker as to what those sums should be.  The builder’s only obligation was to pay Troubleshooters.  The worker’s only entitlement was against Troubleshooters, and in accordance with a different measure.”

338   In the UK line of cases, this principle has been referred to as the “irreducible minimum of mutual obligation necessary to create a contract of service”: Carmichael v National Power PLC [1999] WLR 2042 per Lord Irvine at 2047.  These principles were dealt with at some length, in Brook Street, a judgement referred to extensively by counsel in the present appeal.  In that case, Mrs Dacas was engaged under a contract for services by a labour hire agency Brook Street, to supply her services to a local council as a cleaner.  The relationship endured for some years.  An issue arising in those proceedings was whether Mrs Dacas had a contract with the local council, and if so, whether it was a contract of service.  Lord Justice Mummery at par 49 (with whom Lord Justice Sedley was in general agreement), recognised the requirement of the “irreducible minimum of mutual obligation necessary for a contract of service” but however, in the context of the facts of that case, went on to postulate that it may be possible to find the existence of a contract of service between the local council and Mrs Dacas, not by express agreement, but by implication as a result of the conduct of the parties.  Without deciding the matter, the majority in Brook Street also recognised the possibility of an employment relationship between Mrs Dacas and both Brook Street and the local council concerned, by “reading across the triangular arrangements into an implied contract and taking effect as implied mutual obligations as between Mrs Dacas and the Council”: per Lord Justice Mummery at par 53.

339   Mr Justice Munby, dissenting, whilst recognising the possibility of a contract between a worker and an end user in labour hire cases, was not satisfied that a contract existed between the local council and Mrs Dacas.  In discussing the relevant authorities, Justice Munby referred to Carmichael and observed at par 86:

“The principle which emerges from that line of authority is most simply formulated in the statement by Longmore LJ at para [46] that:

“Whatever other developments this branch of law may have seen over the years, mutuality of obligation and the requirement of control on the part of the potential employer are the irreducible minimum for the existence of a contract of employment.”

As Elias J pointed out in Stephenson v Delphi Diesel Systems Ltd [2003] ICR 471 at para [11]:

“The significance of mutuality is that it determines whether there is a contract in existence at all.  The significant of control is that it determines whether, if there is a contract in place, it can properly be classified as a contract of service, rather than some other kind of contract.”

I respectfully agree.”

340   Additionally, Justice Munby also referred to the observations of the Court of Appeal in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 where MacKenna J said at 515:

“A contract of service exists if these three conditions are fulfilled.  (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.  (ii)  He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master.  (iii)  The other provisions of the contract are consistent with its being a contract of service.

…  As to (i).  There must be a wage or other remuneration.  Otherwise there will be no consideration, and without consideration no contract of any kind.”

341   Having regard to the essential requirement of mutuality of obligation, and in particular the obligation on BHPB to provide consideration in the form of remuneration paid to Mr Brandis for his services rendered, I am not satisfied that BHPB and Mr Brandis were in a contractual relationship.  The requirement of consideration is one that was essential and there was no obligation as between BHPB and Mr Brandis, as opposed to the relationship between BHPB and IW, for BHPB to pay to Mr Brandis his remuneration for services he provided to it.  Put another way, whilst there existed in the general conditions of contract between BHPB and IW (AB 3 tab 8) at clause 37, an ability for BHPB to pay Mr Brandis directly, in the case of default, insolvency or for convenience and there being no reasonable alternative, or on request of IW, such a provision was not one enforceable by Mr Brandis, he not being a party to the contract between BHPB and IW.  In my view, it is essential to establish a contractual relationship between BHPB and Mr Brandis, to point to an enforceable legal right to payment of wages for work performed, as between Mr Brandis and BHPB. 

342   In this case, it seems clear enough, that when a dispute arose as to Mr Brandis's rate of pay, following the unilateral reduction in rates for locomotive drivers purported to be imposed by BHPB, it was to the terms of the contract between Mr Brandis and IW that Mr Brandis turned.  The issue was resolved ultimately, in Mr Brandis's favour, because of his contractual relationship with IW pursuant to the relevant AWA, which prescribed the rate of pay that was ultimately enforced and not any contract, express or implied, between Mr Brandis and BHPB.  It was also clear from the terms of the AWA's entered into between Mr Brandis and IW (AB2 tab 1: AB 3 tab 7) and the evidence, that the obligation on IW to pay Mr Brandis's hourly rate of pay for work he performed for BHPB, was not conditional upon BHPB paying to IW the agreed rate for the provision of Mr Brandis's locomotive driving services.  The obligation on IW to pay Mr Brandis stood alone, subject to IW’s satisfaction that Mr Brandis had rendered the contracted locomotive driving services to BHPB.

343   In terms of the detailed contract documents between BHPB and IW, and between IW and Mr Brandis, it is of course the case that one cannot be confined to the terms of the various agreements, but rather, the relationships between the parties to the agreements must be considered in their totality.   A mere label cannot be put on an arrangement to disguise its true character.  It is also the case that a contractual relationship may be implied from the conduct of parties, viewed objectively and such a conclusion is not dependent upon the subjective intentions of the parties.  Generally speaking, however, “contracts are not to be lightly implied” and the courts must be able “to conclude with confidence that … the parties intended to create contractual relations: Blackpool and Fylde Aero Club v Blackpool B.C. [1990] 1 WLR 1195 at 1202.

344   In this case it was uncontroversial that the extent of control exercised over Mr Brandis during the course of the work he performed whilst on the BHPB rail road was extensive.   However that of itself does not signify a contract of employment between both parties. It is also important to examine the source of those obligations as they arise, as established by the various contractual arrangements.  In particular, by clause 4 - Employee Undertakings, of Mr Brandis's most recent AWA at AB 3 at 68, he agreed with IW, to comply with all applicable legislation, rules regulations and requirements imposed by BHP in connection with the performance of the locomotive driving services. Additionally of course, independent of any contractual obligation, there existed statutory obligations imposed on not just employees, but contractors and sub contractors and other persons, under the Mines Safety and Inspection Act 1994 and associated Regulations.  There were also substantial conditions imposed on IW by BHPB, as set out in Annexure A - Safety Conditions in the Special Conditions of Contract set out at AB 3.

345   It is also apparent from the contract documents in evidence that IW’s obligation was to identify, recruit and source for BHPB, suitably qualified locomotive drivers.  The only requirement imposed by BHPB, under the Special Conditions of Contract, was that drivers had previously been qualified on the company’s Newman to Hedland railroad, hold the required licences and have completed appropriate tests.  There was also evidence at first instance that IW arranged for Mr Brandis to attend induction and other pre-employment courses, although BHPB officers were involved in presentation of material at these programs.  Additionally, I also note that whilst a copy of BHPB's drug and alcohol policy was annexed to the Special Conditions of Contract, by the AWA's entered into between Mr Brandis and IW, Mr Brandis agreed to accept various policies, including those relating to remote site mining and drugs and alcohol, which were policies of IW.

346   Given all of the evidence at first instance, and in particular the detailed contractual arrangements entered into between the parties which were plainly bona fide, in my view, it was not necessary in the circumstances of this case, to imply the existence of any contract, let alone a contract of service, between Mr Brandis and BHPB.  Consistent with the view of Justice Munby in Brook Street, what BHPB was paying for in the contract with IW, was for the recruitment and supply of suitably qualified and experienced, locomotive drivers, who had driven locomotives for BHPB before. The recruitment and administration arrangements, payroll, insurance, including workers compensation and superannuation, and other matters were the responsibility of IW.

347   I also think it relevant to observe that on the evidence at first instance, at no stage did Mr Brandis seem to consider himself an employee of BHPB.   At all material times, he clearly considered himself an employee of IW, but self evidently, wished to become a BHPB employee once again, by making successive job applications for BHPB locomotive driver positions.  In the context of the existence of any implied contractual relationship of employment with BHPB, Mr Brandis’s own conduct was inconsistent with such a contract.

348   For the foregoing reasons in my view, there was no contract of service on foot between BHPB and Mr Brandis. As to the existence of a “doctrine of joint employment”, so described, I do not consider it necessary to explore that issue in the context of this appeal.  That matter can await another day.

349   I would therefore not uphold this ground of appeal.

Ground 2

350   Having concluded that ground one is not made out, it is not necessary to deal with ground two.

Ground 3

351   This ground of appeal complains, on a number of bases, that the learned Commissioner erred in holding that the refusal of BHPB to employ Mr Brandis was, given all of the circumstances, unfair.  At the outset, I agree with the submissions of Mr Schapper, that the learned Commissioner misdirected himself as to the proper question to be asked in relation to this issue.  It is not whether on the facts as found, the decision to not employ Mr Brandis was reasonably open, nor was there any necessity for a “relatively high hurdle” to be surmounted to persuade the Commission in favour of the appellant’s claim.  What was required, was a consideration of whether, in all of the circumstances of the case, as a matter of equity, good conscience and the substantial merits of the case under s 26(1)(a) of the Industrial Relations Act 1979 (“the Act”), it was industrially unfair for BHPB to refuse to employ Mr Brandis. 

352   As to this ground, I agree with the reasons expressed by the President, that in all of the circumstances of this case, it was unfair for BHPB to refuse to employ Mr Brandis.  In particular, with due respect, I found the evidence as to the psychologist’s report, as a result of a psychometric test undertaken by Mr Brandis, to be somewhat startling.  Whilst it is the case that this evidence was not solely relied upon by BHPB in its decision to not offer employment to Mr Brandis, it is in my view, disturbing that the psychological assessment was undertaken, in the apparent absence of any knowledge or consideration by the person undertaking it, that Mr Brandis had in fact, operated locomotives at BHPB operations for about 20 years, successfully, prior to his application for employment on that particular occasion.

353   I do not wish to say anything further as to this ground of appeal save that it should be upheld.  I agree with the declaration and orders proposed.

THE PRESIDENT:

354   For those reasons, the appeal is upheld and the decision at first instance varied.

       Order accordingly