WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2014 WAIRC 01285

DELIVERED : THURSDAY, 27 November 2014

FILE NO. : U 171 OF 2013

Applicant

AND

The Black Cockatoo Preservation Society of Australia (ABN: 75 980 610 063)

Respondent

Catchwords : Industrial law (WA) – Termination of employment – Harsh, oppressive and unfair dismissal – Whether the respondent is a trading or financial corporation – Whether the applicant was an employee or an independent contractor – Principles applied – Lack of significant or substantial trading activity – Totality of the relationship considered – Claim within jurisdiction – Application to be listed for hearing

Legislation  : Commonwealth Constitution s 51(xx)

    Associations Incorporation Act 1987 (WA) ss 14, 15

    Fair Work Act 2009 (Cth) ss 14, 26

    Industrial Relations Act 1979 (WA) s 7

Result : Jurisdiction found

Representation:

Counsel:

Applicant : In person

Respondent : Mr G Dewhurst and with him Ms C Dewhurst

Case(s) referred to in reasons:

Aboriginal Legal Service of Western Australia (Inc) v Lawrence [No 2] (2008) 89 WAIG 243

Hollis v Vabu Pty Limited (2001) 207 CLR 21

Personnel Contracting Pty Ltd t/as Tricord Personnel v The Construction Forestry Mining and Energy Union of Workers (2004) 85 WAIG 5

Case(s) also cited:

E v Australian Red Cross Society (1991) 27 FCR 310

Educang Ltd v Queensland Industrial Relations Commission (2006) 154 IR 436

Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10

Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc (2002) 120 FCR 191

Quickenden v O’Connor (2001) 109 FCR 243

Shahid v Australasian College of Dermatologists (2007) 72 IPR 555

The Commonwealth of Australia and anor v The State of Tasmania and others (1983) 158 CLR 1

The Queen v The Judges of the Federal Court of Australia; Ex parte The Western Australian National Football League (Incorporated) (1979) 143 CLR 190

United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346

Reasons for Decision

1         By this application the applicant Mr Digney claims he was unfairly dismissed by the respondent, The Black Cockatoo Preservation Society of Australia on 26 September 2013.  Mr Digney was the former General Manager of the Society.  Mr Digney contends that he was forced to resign from his position with the Society, by reason of the conduct of the Society’s Board.

2         The matter has had a somewhat torturous history.  Before the Commission as otherwise constituted, various proceedings have taken place to date.  The matter was reallocated to my Chambers on 25 September 2014.  The matter has been listed for hearing to deal with various issues of jurisdiction raised by the Society.  The two issues dealt with in these reasons are:

(a) Whether the Society is a trading corporation and therefore is a national system employer for the purposes of the Fair Work Act 2009 (Cth); and

(b) If the Society is not a constitutional corporation, whether Mr Digney was engaged by the Society as an employee or as an independent contractor.

3         Briefly, Mr Digney has asserted that he was constructively dismissed following various events, including the bringing of a bullying complaint by him against several members of the Society’s Board.  Additionally, Mr Digney contended that the Society’s conduct in bringing baseless allegations of misconduct against him in early September 2013 and his suspension from the Society, whilst these matters were being dealt with, was part of the Society’s conduct that made it untenable for him to remain as the Society’s General Manager.

4         For the Society it was initially contended in its notice of answer filed on 28 October 2013, that there was no dismissal in this case, because Mr Digney was engaged on a fixed term six month contract from 15 April to 11 October 2013, which contract was not ongoing because of a lack of funding for Mr Digney’s position.  By an amended notice of answer filed on 23 May 2014, it is further asserted that Mr Digney was not an employee, but was employed as an independent contractor. 

5         By a further amended notice of answer filed by the Society on 25 August 2014, the Society has now further contended that it is a trading corporation and is subject to the federal jurisdiction under the FW Act.  It is less than satisfactory that it has taken some seven months and 10 months respectively, for the Society to raise these various matters going to the jurisdiction of the Commission to deal with Mr Digney’s claims. I note in passing that the Society was represented in these proceedings by a firm of solicitors until 5 August 2014.

Constitutional corporation

6         The first matter to deal with is the assertion by the Society that it is a constitutional corporation for the purposes of s 51(xx) of the Commonwealth Constitution. If it is, then by reason of ss 14 and 26 of the FW Act, the application must be dismissed for want of jurisdiction.

7         The relevant test as to whether a corporation is a trading or financial corporation was dealt with by the Industrial Appeal Court in Aboriginal Legal Service of Western Australia (Inc) v Lawrence [No 2] (2008) 89 WAIG 243.  In this case, Steytler P, with whom Pullin J agreed, set out the relevant principles dealt with by six decisions of the High Court, as to the test in determining whether a corporation should be regarded as a trading corporation. At par 68 Steytler P summarised the relevant principles falling from those cases in the following terms:

(1) A corporation may be a trading corporation even though trading is not its predominant activity: Adamson (239); State Superannuation Board (303 - 304); Tasmanian Dam case (156, 240, 293); Quickenden [49] - [51], [101]; Hardeman [18].

(2) However, trading must be a substantial and not merely a peripheral activity: Adamson (208, 234, 239); State Superannuation Board (303 - 304); Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10, 20; Fencott (622); Tasmanian Dam case (156, 240, 293); Mid Density (584); Hardeman [22].

(3) In this context, 'trading' is not given a narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services: Ku-ring-gai (139, 159 - 160); Adamson (235); Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169, 184 - 185, 203; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325, 330; Quickenden [101].

(4) The making of a profit is not an essential prerequisite to trade, but it is a usual concomitant: St George County Council (539, 563, 569); Ku-ring-gai (140, 167); Adamson (219); E (343, 345); Pellow [28].

(5) The ends which a corporation seeks to serve by trading are irrelevant to its description: St George County Council (543, 569); Ku-ring-gai (160); State Superannuation Board (304 - 306); E (343). Consequently, the fact that the trading activities are conducted is the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as 'trade': St George County Council (543) (Barwick CJ); Tasmanian Dam case (156) (Mason J).

(6) Whether the trading activities of an incorporated body are sufficient to justify its categorisations as a 'trading corporation' is a question of fact and degree: Adamson (234) (Mason J); State Superannuation Board (304); Fencott (589); Quickenden [52], [101]; Mid Density (584).

(7) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade: State Superannuation Board (294 - 295, 304 - 305); Fencott (588 - 589, 602, 611, 622 - 624); Hughes (20); Quickenden [101]; E (344); Hardeman [18].

(8) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading: Adamson (209, 211); Ku-ring-gai (139, 142, 160, 167); Bevanere (330); Hughes (19 - 20); E (343); Fowler; Hardeman [26].

8         It is therefore a question of fact and degree as to whether the trading activities of a corporation are sufficient for the corporation to be characterised as a trading corporation.

9         Evidence relevant to this issue is as follows.  Ms Griffiths is a member of the Board of the Society and is its Treasurer.  She has been on the Board since about 2008.  Ms Griffiths gave some evidence as to the nature of the Society and its activities. The Society is an incorporated body formed for charitable purposes, and is the primary organisation of three, dedicated to the preservation of the Black Cockatoo species of bird.  The Society operates from a property called “Kaarakin”, which is the Black Cockatoo Conservation Centre in Martin, Western Australia. The aims of the Society, set out in its constitution, provide that it is directed towards the “Preservation of endangered Black Cockatoos and Black Cockatoos which are not nominated on the endangered list.”  Ms Griffiths said that the Society has a Board, presently one full time and two part time employees and a number of volunteers.

10      Ms Griffiths is involved in the financial management of the Society.  She testified that the Society is principally funded from grants. These grants may be for designated projects. The major source of grant funding is from Lotterywest, a State Government statutory authority. Other sources of grant funding include from LandCorp; the Department of Environment Regulation; Alcoa and others; and some local government organisations. Ms Griffiths testified that the vast majority of income for the Society comes from these sources.

11      Another source of income is from donations, although Ms Griffiths testified that this is a small proportion of total income, for example for the 2012-13 year, it represented some $74,000. The third source of income is from various fundraising work. This source of income represents a smaller proportion again, for example for 2012-13 the fundraising income was about $29,000. The fundraising activities described by Ms Griffiths include for example, “sausage sizzles” at Bunnings stores, auctions and other types of activity.

12      Ms Griffiths was involved in the preparation of the formal accounts of the Society. Exhibit R4 is a copy of the income and expenditure statement for the Society for 2012-13 and 2013-14 financial years. The 2012-13 statement is audited.

13      From these statements, for the 2012-13 year, the total income of the Society was $610,444.80. The figure for the 2013-14 year was $457,691.22.  Income is described in the statements broadly consistent with Ms Griffiths’ evidence. Under the heading “Venture Partnerships & Support” which is in essence donations of various kinds from private organisations and others, the figure for 2012-13 was $131,045.15 and for 2013-14 $69,806.37. Under the heading “Fund Raising Activities/Events” which included sausage sizzles, auctions, open days and sales of merchandise, the figure for 2012-13 was $28,996.95 and for 2013-14 some $19,042.15. A further heading “Projects & Business Activities”, reflect grants of one form or another, most of which is from Alcoa, and shows for 2012-13 $192,486.82 and for 2013-14 $195,676.24. Under a heading “Other income”, comprising bank interest and other items, including “Presentations/Training” and “Sales - Shirts” is income for 2012-13 of $30,902.93 and for 2013-14 $11,003.45. Finally, is the major component of the Society’s income which is headed “Lotterywest Income” which for 2012-13 was $227,012.95 and for 2013-14 $143,271.86.

14      Mr Digney also gave some evidence about these matters, from his position as General Manager. He testified that he was involved in preparing the grant application for Lotterywest.  His evidence was generally that in relation to the Lotterywest grant, and other grants to the Society, there was no tradeable commodity or product of any form flowing from the Society to the grantor or funder as the case may be, in return for the funds provided to the Society.

15      From the evidence of Ms Griffiths, the terms of the accounts of the Society tendered in evidence, and from the evidence of Mr Digney, it is plain that the vast bulk of the income of the Society comes from grants, of one form or another, from both government and private sector organisations.  The Society provides no services as such, for this income. The income, on Ms Griffiths’ evidence, pays for the upkeep of the Kaarakin property, running costs and various items of capital expenditure. Additionally, funding is also obtained for particular projects, identified by the Society as necessary for pursuing its aims in relation to conservation of the Black Cockatoo species.

16      While the Society is responsible for ensuring the disbursement of this grant income is done efficiently in accordance with the purposes for which the funds are provided, that in and of itself cannot connote trading activity. Tendered as a bundle of documents as exhibit R17, were various funding agreements between funders and the Society. Whilst for example, the “Western Australian NRM Program Funding Agreement” is quite detailed, it in the main concerns legal requirements in relation to the application of the funding and its use in this particular case, of some $40,000 for a particular project to rehabilitate part of a Black Cockatoo habitat. The Lotterywest grant of $240,370 paid for the staff of the Society including the General Manager and others, and for some property improvements as required. The grant from Alcoa, again, involved habitat restoration for the Black Cockatoo and covered revegetation, planting and volunteer time.

17      Having regard to all of this evidence, and having regard to the aims of the Society as set out in its constitution, it cannot be said that the bulk of the Society’s income results from trading activities of any kind.  In my view, there is a distinct lack of “commerciality” in any of these grant and funding arrangements.

18      The only activities that could be considered trading activities are those in the category of “fundraising” in the statements of account. For 2012-13, these activities generated some $28,996.95 in revenue.  If one generously added to this about $5,000 for “Presentations/Training” and “Sales - Shirts”, this totals $34,000 approximately. This represents about 5.6% of the Society’s total revenue for that year.  In my opinion, on the authorities, this cannot be regarded as “significant or substantial” trading activity, in the context of the overall activities of the Society.  For the 2013-14 year, about 4.7% of income could be regarded as from trading activities, of this kind.

19      Therefore I am far from persuaded that the Society is a trading corporation for the purposes of s 51(xx) of the Commonwealth Constitution and therefore the Society is not a national system employer for the purposes of the FW Act.

Employee or independent contractor

20      Essential for the purposes of the Commission’s unfair dismissal jurisdiction, is that Mr Digney had been, at all material times, an “employee” for the purposes of s 7 of the Industrial Relations Act 1979.  Section 7 of the Act provides as follows:

7.  Terms used

  (1) In this Act, unless the contrary intention appears —

   …

  employee means —

   (a) any person employed by an employer to do work for hire or reward including an apprentice; or

   (b) any person whose usual status is that of an employee; or

   (c) any person employed as a canvasser whose services are remunerated wholly or partly by commission or percentage reward; or

   (d) any person who is the lessee of any tools or other implements of production or of any vehicle used in the delivery of goods or who is the owner, whether wholly or partly, of any vehicle used in the transport of goods or passengers if he is in all other respects an employee,

  but does not include any person engaged in domestic service in a private home unless —

   (e) more than 6 boarders or lodgers are therein received for pay or reward; or

   (f) the person so engaged is employed by an employer, who is not the owner or occupier of the private home, but who provides that owner or occupier with the services of the person so engaged;

21      The answer to this question requires consideration of the relevant common law principles.

22      In relation to this issue, the Society asserted in its amended notice of answer that “The applicant was offered employment by the Society, he, however declined this request and asked to be paid on an ABN basis”. On the other hand, Mr Digney contended that at all material times he was an employee of the Society and was employed as its General Manager under a written contract of employment with effect from 22 August 2012.

23      The relevant principles as to whether a person should, as a matter of fact and law, be regarded as an employee or an independent contractor, have been dealt with by the Industrial Appeal Court. In Personnel Contracting Pty Ltd t/as Tricord Personnel v The Construction Forestry Mining and Energy Union of Workers (2004) 85 WAIG 5, Steytler J dealt with this issue at pars 20-28, EM Heenan J at pars 50-52 and Simmonds J dealt with the issue at pars 98-100. In particular, Simmonds J said at pars 95-101 as follows:

95 The common law test for distinguishing a relationship of employer/employee, on the one hand, and principal/independent contractor, on the other, has recently been reviewed in some detail in the judgment of Hasluck J of this Court in Birighitti  (supra), at [57] to [67]. The other members of the Court (Anderson J, who dissented on the jurisdictional issue in the case, and Scott J) did not find it necessary to enter into the question in as much detail because of the case's particular facts.

96 In this case, where it seems to me the matter is rather more evenly balanced than in Birighitti , I consider it is necessary to review the matter again, particularly as it was contended in this case that there had been a shift in the law not entered into in Birighitti . I review the matter again without meaning to depart from the view of Hasluck J there in any way, but to emphasise matters of first principle particularly relevant to this case.

97 The most recent High Court authority in point, for the purposes of vicarious liability for the negligence of a bicycle courier, is Hollis v Vabu Pty Ltd (supra). There was a clear majority on the issue of the application of the test, that of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, with McHugh J dissenting, and Callinan J not expressing a concluded view on the matter. As to the test itself, however, I see no clear difference between all of the members of the Court who expressed a concluded view.

98 The test set out in Vabu by the majority is expressed in terms of the difference between a person (an employee) whose work serves another, and is done in that other's business, on the one hand, and a person whose work is likewise for the benefit of another's business, but is done in the course of the carrying on of a trade or business of the person doing the work, on the other. The majority referred (Vabu, at 39) for this purpose to Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41, at 48, per Dixon J, and to Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, at 217 per Windeyer J, where language of this sort is used. The Vabu majority also referred to Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313, at 366 per McHugh J, where the distinction is expressed in terms of the independent contractor as a person who does the work not as "the representative of the employer".

99 For the application of the test, and particularly for the relevance of the matter of "control" of the work done, the Vabu majority refer to the dicta in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, at 29 per Mason J. There, his Honour acknowledges the historical significance of the "control test" and the difficulties in using it in the historical ways in modern working conditions, where he says

"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 Brothers [(1955) 93 CLR 461, 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."

100 What his Honour meant by the reference to the factors, including but not limited to control, subsumed by the "totality of the relationship" is indicated by an earlier passage in his judgment in Stevens (supra), which is not referred to in Vabu, but which is a passage quoted in Odco as setting out the law on this point ((supra) at 754):

"The approach of this court has been to regard it [control] merely as one of a number of indicia which must be considered in the determination of the question: Queensland Stations Pty Ltd v FCT (1945) 70 CLR 539 at 552; Zuijs' case [supra]; FCT v Barrett (1973) 129 CLR at 401; 2 ALR 65; Marshall [supra] at 218. Other relevant factors include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee."

101 As these dicta tend to indicate, the application of the test is a matter of some difficulty, as this case illustrates. I need to consider that question separately.

24      His Honour then went on to apply the test set out in the various decisions of the High Court referred to, and took into account a number of factors including control, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax, the delegation of work, indicia of a separate business, integration in the organisation, and the language of the parties’ written contract: see pars 108-150 inclusive.

25      The “multi factor” test referred to and applied by Simmonds J, as set out above, was referred to and applied by the High Court in Hollis v Vabu Pty Limited (2001) 207 CLR 21.

26      The issue in this case is the status of Mr Digney as at the time of the termination of the relationship he had with the Society as at September 2013. Mr Digney testified that when he started at the Society as the General Manager, he inherited the former General Manager’s terms and conditions of employment. The only difference was that because of his tax situation at that time, he requested, and the Society agreed, to pay him on an “ABN basis”.  That is, he would be responsible for paying his own income tax to the Australian Taxation Office.

27      In terms of his position, Mr Digney testified that he worked as the General Manager under the direction and control of the Board of the Society.  He said that he only provided his labour to the Society and nothing else.  He did not work for any other organisation.  Mr Digney testified he was responsible for all aspects of the management of the Society, including in conjunction with assistance provided by an organisation called the South East Regional Centre for Urban Landcare, on all human resources and payroll issues.

28      The role of SERCUL was outlined in the evidence of Ms Robert, the Chief Executive Officer of the organisation. Ms Robert testified that SERCUL had entered into an agreement with the Society (see exhibit R15) to effectively provide human resources and payroll services.  SERCUL provides these services to other bodies similar to the Society, which do not have the administrative infrastructure to deal with these matters themselves. In return for providing the payroll management service, SERCUL charged a fee to the Society.  Ms Robert confirmed that in relation to employees of the Society, apart from the provision of payroll services, and the payment of insurances etc for employees, SERCUL has no day to day involvement with the duties and responsibilities of Society employees. There was no reporting relationship between the employees of the Society and SERCUL.

29      Mr Digney’s most recent written contract of employment was tendered as exhibit R2. This document is described as “Offer of 6 Month Employment Contract”.  The cover page to the document sets out Mr Digney’s appointment as the General Manager for a six month contract commencing on 15 April and terminating on 11 October 2013. The location is specified as Martin, Western Australia. The hours of work are specified as commencing at 8:00am and there is an express expectation that the General Manager will work the hours necessary to achieve the responsibilities of the position. The responsibility and duties are set out in accordance with an attached duty statement. The remuneration is provided as $109,400 “paid on an ABN basis”.

30      In the following pages is a detailed document headed up “Status of employment contract”.  The document sets out in some detail the position of General Manager of the Society. The contract specifies the hours of work, the organisational responsibilities, the duties of the General Manager, the salary and superannuation arrangements, provision for annual leave, sick leave, long service leave, carer’s leave and unpaid carer’s leave.  Furthermore, provision is made for bereavement leave and public holidays. Other terms include a termination of employment clause specifying that either the Society or Mr Digney could terminate the employment by the giving of the required notice.  The agreement also contained a redundancy clause specifying what would occur in the event of the employee being made redundant.

31      The most recent contract, which was due to expire on 11 October 2013, was signed by Mr Digney and co-signed by Ms Griffiths, as the Treasurer of the Society and Board member.  It seems that she did so in or about June 2013.  An issue was made in relation to Ms Griffiths’ capacity to sign the contract of employment. I am not persuaded to any extent by arguments as to that issue.  Ms Griffiths was a member of the Board. She was the only signatory to the significant contract between the Society and SERCUL in relation to the services agreement between the two organisations. Whilst there was some suggestion by the Society that only the Chair and Vice Chair of the Board could sign employment contracts, it was accepted that no such provision exists in the constitution of the Society.  Furthermore at the time the contract was signed by Ms Griffiths, nor any time shortly thereafter, was any suggestion made by Ms Griffiths or any other member of the Board, that Ms Griffiths signed the contract under duress or alternatively she had no lawful authority to do so.  In my view, Ms Griffiths had ample actual authority to sign Mr Digney’s contract, and certainly had the ostensible authority to do so.

32      The position of members of committees of management of incorporated associations, in terms of their duties and responsibilities to members and the incorporated body itself, are probably analogous to those of company directors.  Aside from specific statutory obligations set out in relevant legislation applying to incorporated associations, the obligations and duties of members of committees of management are those established by equitable and common law principles: LexisNexis, Halsbury’s Laws of Australia (at 19 November 2014) [435-205].

33      For the purposes of this matter, the terms of the Associations Incorporation Act 1987 are particularly relevant. Sections 14 and 15 of the AI Act are in the following terms:

14.  Contracts by incorporated associations, how made etc.

(1) Contracts may be made by or on behalf of an incorporated association as follows —

(a) a contract which, if made between natural persons, would be required to be in writing under seal may be made by the incorporated association under its common seal; and

(b) a contract which, if made between natural persons, would be required to be in writing signed by the parties may be made on behalf of the association in writing by any person acting under its express or implied authority; and

(c) a contract which, if made between natural persons, would be valid although not in writing signed by the parties may be made orally on behalf of the association by any person acting under its express or implied authority.

(2) A contract may be varied or rescinded by or on behalf of an incorporated association in the same manner as it is authorised to be made.

15.  Contracts, when validity of affected by deficiency in association’s legal capacity

(1) A contract made with an incorporated association is not invalid by reason of any deficiency in the legal capacity of the association to enter into, or carry out, the contract unless the person contracting with the association has actual notice of the deficiency.

(2) An incorporated association that enters into a contract that would, but for the provisions of subsection (1), be invalid is empowered to carry out the contract.

(3) This section does not prejudice an action by a member of an incorporated association to restrain the association from entering into a transaction that lies beyond the powers conferred on the association by this Act or its rules.

34      The contract between Mr Digney and the Society was not one required to be made under seal.  Nor was it required, as a matter of law, to be in writing.  An employment contract, although preferably, it should be in writing or evidenced in writing, may be oral. Ms Griffiths is not only a member of the Board of the Society but is also its Treasurer.  She was, as I have mentioned above, a signatory to the contract with SERCUL.  I am satisfied, that consistent with s 14 of the AI Act Ms Griffiths had, if not express, then certainly implied authority to sign the contract with Mr Digney, on behalf of the Society.

35      In any event, as s 15 of the AI Act makes plain, the contract with Mr Digney cannot be invalidated, except in circumstances where he had notice of any deficiency, which at or around the time of entry into the contract, he did not.  Furthermore, as a matter of fact, the parties acted on the terms of the contract for its duration and the Society cannot now, in retrospect, seek to avoid its terms on the basis contended.

36      The evidence of the Society, through Mr Garrett, the Vice Chair of the Board at the time, and Ms Griffiths, was that Mr Digney, when he first started in the position, wanted to be paid on an “ABN basis”. It was on that basis that the Society considered Mr Digney to be an independent contractor and not an employee.

37      The law in relation to this issue is that a range of indicia is used in assessing whether the true nature of the relationship is one of employment or that of independent contractor. This requires a court to assess the totality of the relationship, having regard to a broad range of factors. The following factors I will consider, having regard to the relevant authorities set out earlier in these reasons.  Additionally, I will have regard to the “Factors in the assessment” as set out in pars 2.105 to 2.170 in Sappideen C, O’Grady P, Warburton G and Eastman K, Macken’s Law of Employment (6th ed, 2009) 52-64.

38      Firstly in relation to control, the issue in relation to this criterion is not just the actual exercise of day to day control by an employer over an employee but the residual right to exercise it.  In this case, Mr Digney was the General Manager of the Society and was given a large degree of autonomy in the work to be performed. However, it was clear from the evidence and exhibit R2, that Mr Digney was responsible to the Board of the Society and the Board plainly had the capacity to direct and control Mr Digney if necessary.

39      In relation to working for others, this can be an indicator of independence, along with having the capacity to do so.  In this case there was no evidence that at the time of the last contract entered into between Mr Digney and the Society, that Mr Digney did any substantial work for anyone else other than the Society.

40      In relation to the existence of a separate workplace and advertising for business, there was no suggestion on the evidence in this case that Mr Digney worked from other business premises in his own right or sought clients or customers to perform work independent of that performed for the Society.

41      In relation to the investment of capital, in this case Mr Digney did not invest in any capital necessary for the performance of his work.  All that was provided by him was his own management skill and experience.

42      As to the criteria of delegation, an indicator of independent contractor status is the right to delegate performance of work to others. There was no suggestion on the evidence that in this case, Mr Digney had any capacity to delegate his duties as General Manager to any other person.

43      As to the criteria of integration, in this matter, there was no suggestion that Mr Digney, as General Manager of the Society, was regarded as other than an integral part of the Society as its General Manager. Indeed, as the General Manager of the Society, he was responsible for providing leadership and the overall running of the organisation.

44      In relation to taxation, tax considerations can be influential but are often neutral.  The test for income tax deductions by an employer under income taxation legislation is not the same as the test at common law as to whether a person is an employee or an independent contractor. In the present case, Mr Digney’s taxation arrangement to be paid on an “ABN basis”, could point towards independence, however of itself, without other indicia, it is certainly not conclusive.  Furthermore, in this case, the evidence shows that Mr Digney’s request to be paid on this basis prior to commencing as the General Manager of the Society was because of property investments that he then held, not because of any purported claim to operating an independent business.

45      In relation to the method of payment and other benefits, payment by results or on completion of tasks, rather than by salary or wage, may indicate independence.  In this case, Mr Digney was paid an annual salary, on a six month pro rata basis.  As I have already set out above, the contract of employment document also provided for the usual leave entitlements that are applicable to an employer/employee relationship.

46      In terms of an employer’s right to dismiss, a contractual right in those terms empowering the employer party to terminate the relationship is an indicator of employment. In this case, Mr Digney’s contract with the Society contained such a right.

47      Finally, the express declaration of the parties can be influential.  However, a label cannot be attached to the relationship in an attempt to alter its essential substance.  In this case, the terms of exhibit R2 sets out in some detail a contract document which presents in all respects, Mr Digney as an employee of the Society as its General Manager.

48      The Commission needs to consider all of the evidence and assess the totality of the relationship, to determine whether a person was an employee, or an independent contractor.  In this case, having regard to the indicia, in my view, it is not the case that Mr Digney was an operator of his own business in his own right.  I am satisfied that, at all material times, Mr Digney was an employee of the Society for the purposes of the Act, despite the fact that he requested to be paid in the manner which he was.

49      Accordingly, I am satisfied that the Commission has jurisdiction to enquire into and deal with Mr Digney’s unfair dismissal claim against the Society.  The matter will now be re-listed to hear his claim on the merits.  This will include, of course, whether Mr Digney was “dismissed” by the Society.