The Fair Work Commission's (FWC) decision in Alan Dick v
James Voros, to characterize the taxi owner and driver
relationship as one of employment, is in direct contrast to earlier
Federal Court decisions and rulings of the ATO.
The FWC dismissed the jurisdictional challenge by the taxi owner
and held that the taxi driver was not a bailee or independent
contractor of the owner, thereby enabling the driver to gain access
to the unfair dismissal remedies under the Fair Work Act
The taxi driver worked for the owner between 1996 until December
2012, when the relationship was terminated. The agreement was
verbal and included an earning arrangement which allowed the driver
to keep 48% of his takings, whilst the owner retained 52%.
Commissioner Ryan of the FWC distinguished the earlier Federal
Court of Appeal decision in De Luxe Red & Yellow Cabs
Co-Operative (Trading) Society Ltd & Ors v Commissioner of
Taxation (De Luxe) which held cab drivers were contractors,
rendering it unhelpful in dealing with a jurisdictional challenge
in an unfair dismissal case. He also noted that the decision lacked
direct evidence from the drivers as to the actual features of the
relationship, and was informed by generalisations as to the
character of the relationship.
Commissioner Ryan considered the changing industrial relations
environment since De Luxe. He recognised that at the time
no industrial instrument applied regulating taxis, and that the
subsequently introduced Passenger Vehicle Transportation Award
2010 impacted upon the protections now available to taxi
A qualitative assessment of the relationship was conducted by
reference to a re-casted summary of the law in the FWC full bench
decision Jiang Shen Cai trading as French Accent v Do
Rozario. Factors in support of the employment relationship
the exclusivity of the driver's services;
the owner's responsibility to maintain the vehicle;
the driver's inability to delegate or sub-contract;
the driver's inability to build goodwill as an independent
the owner's ability to terminate the driver; and
the minimal expenditure by the driver on business
The earnings of the cab driver were also considered and it was
found that the cab driver received an annual earning substantially
inferior to the award entitlement, and contrary to a driver
conducting his own business.
The Commissioner ruled that the driver was "clearly and
unambiguously not carrying on a business of his own but is clearly
and unambiguously providing his personal labour".
Notwithstanding, the unequivocal findings of the FWC, various
factors were identified in possible support of a bailment or
contractor relationship, including:
a 52:48 split arrangement in relation to takings instead of a
the driver having an ABN number, albeit at the request of the
the fact that during the 16 years the driver never requested
nor received any sick leave and paid holiday leave.
The FWC heard evidence from both parties that during the 16 year
relationship there were no PAYG deductions made on the driver's
remuneration. The taxi owner exhibited an ATO document which sat in
stark contrast with case law and set a different test for the
existence of an employment relationship. Although the ATO advice
did not vindicate the taxi owner's position it aligned with the
parties' assumption as to the contractor relationship.
The case is a pertinent reminder of the substantive approach
being taken by courts, and the obligations of employers to ensure
accurate classification of workers, and the obligation to provide
their due entitlements pursuant to the Fair Work Act 2009,
the National Employment Standards, and any relevant Modern
The courts will continue to look behind the label the parties
use to describe their relationship, and focus on the reality of
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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