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
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
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
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.
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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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