Australia: Fair’s fare for cabbies: taxi owners, drivers and the employment relationship

Last Updated: 11 March 2014
Article by George Spiliotis and Aneeka Munshey

Voros v Dick [2013] FWCFB 9339 (4 December 2013)

The unprecedented ruling of Commissioner Ryan of the Fair Work Commission (FWC) that the taxi owner-driver relationship constituted an employment relationship, has been reversed by the full bench of the FWC. In doing so, the FWC sought to encourage consistency and a standardized approach, by focusing upon the fundamental elements of an employment relationship. Interestingly, given the significance of the decision to the taxi-cab industry, the FWC allowed the Australian Taxi Drivers Association to intervene in the appeal and make submissions in support of the driver's rights.

Mr Alan Dick was engaged as a taxi driver by Mr James Voros, the owner of the taxi. At the conclusion of the 16 year arrangement between the parties, Mr Dick sought to claim unfair dismissal on the basis that he was an employee and entitled to the protections under the Fair Work Act 2009.

At first instance, Commissioner Ryan considered the nature of the relationship as it applies to the taxi industry, and highlighted factors including, inter alia, the exclusivity of the driver's services and the below award remuneration of the driver as indicative of an employment relationship.

The full bench quashed the decision of Commissioner Ryan and considered that the Commissioner's analysis of the common law criteria, "distracted him, with respect, from the real question: was Mr Dick an employee of Mr Voros?"

In concluding that the relationship constituted one of bailment rather than employment, the FWC turned to the "standard model" set out in Yellow Cabs of Australia Limited v Colgan (Yellow Cabs). In Yellow Cabs the Industrial Commission of NSW held, "the matter must be determined, not by attention to the strict technical meaning of individual expressions used but upon the whole of the terms of the agreement." The terms of the agreement did not themselves provide for the "detailed and continuous control and direction" necessary for the relationship of employer and employee.

The FWC held that the circumstances of the present case were substantially to the same effect as those referred to in a long line of authority, notwithstanding the disparity in the nature of those claims, including claims for negligence and pursuant to taxation and stamp duty legislation.

The FWC noted that despite the reversal of the decision, it was not to exclude the possibility of an employment relationship if a type of working arrangement significantly different to previous cases could be identified. Mr Dick argued that the present case was sufficiently distinct to the standard model in the following ways:

  • Mr Dick provided "personal service" to Mr Voros and was not permitted to delegate the performance of work; and
  • Mr Voros had the power to dismiss Mr Dick.

The FWC rejected both submissions. With respect to the first, the FWC held that neither the terms of the oral agreement or under the arrangement as it operated in practice, required Mr Dick to perform any work and provide any services for the benefit of Mr Voros. Rather, Mr Dick was free to perform as much work as he liked, without reference to Mr Voros. Ultimately, the level of control suggested by Mr Dick was not accepted by the FWC, finding that a 'contractual arrangement' existed instead of any 'contractual obligation' which Mr Dick had to Mr Voros.

The further submission by Mr Dick in respect of the power to terminate as a relevant indicator of the employment relationship was dismissed by the FWC on the basis that it was not founded upon an actual term of the agreement but was inferred due to the circumstances in which the relationship ended. The termination was exacerbated by collateral issues of late and non payment by Mr Dick. In all the circumstances, the manner of dismissal in fact supported the conclusion of a bailment relationship.

Additionally, the FWC noted the reliance placed by Commissioner Ryan upon the remuneration of Mr Dick as being below the award wages and determinative of an employment relationship, was without proper basis. Instead, the FWC held that the previous line of authority stood for the contrary proposition. If the worker was not remunerated by way of regular wages, leave entitlements and taxation deductions, usually no employment relationship existed.

The present case was considered to fit squarely within the current paradigm and did not have a distinctive character to justify a decision at odds with the established statutory setting. Accordingly, Mr Voros's appeal was accepted and Mr Dick's application for unfair dismissal was dismissed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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