Worker or Contractor?
Jafarian v WildFire Interiors Pty Ltd  NSWPICPD 24
The Appellant, Masoud Jafarian, claimed that on 15 February 2018 in the course of employment with the Respondent, Wildfire Interiors Pty Limited, he fell from a ladder and sustained injury to the cervical and lumbar spine.
He made a claim for medical expenses for the cost of an L5/S1 anterior lumbar interbody fusion. The Insurer declined liability for surgery on the grounds that the Appellant was not a “worker” within the meaning of section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (“the 1998 Act”) and was in fact operating as a contractor through his own Company.
From about July 2017 until the Appellant’s injury on 15 February 2018, he worked as a painter with the Respondent. The Appellant had been recommended to Mr Rujnic (the Director of the Respondent) when he needed additional assistance. Both the Appellant and Mr Rujnic were the only two people involved in the arrangement, there was no written contract and each had their own Company structure. However, the Appellant’s business, Efficient Handyman Services Pty Limited (“EHS”), was deregistered on 3 December 2017. The ABN status was cancelled on 24 April 2018 and its GST registration was cancelled on 13 February 2018. Mr Rujanic was reportedly unaware that EHS had been deregistered.
Worker Compensation Commission Proceedings
The Appellant’s claim for medical expenses proceeded to Arbitration and it was found that he was not a “worker” within the meaning of section 4 of the 1998 Act at the time of his injury. Instead it was determined that the Respondent had contracted with EHS. In coming to this decision, Senior Arbitrator Glenn Capel referred to a number of indicia, including:
- Tax invoices submitted to the Respondent from the Appellant contained a business ABN and logo.
- The Appellant accounted for GST payments by completing BAS statements and the only tax invoice to exclude GST was that dated 16 February 2018, the day after his injury.
- The Appellant issued similar invoices on the EHS letterhead to other clients.
- Payments to the Appellant were made to the EHS business account and not to his personal account.
- The Appellant’s personal and business tax returns were combined and identified the business name as Efficient Handyman Services and included his ABN.
- The Appellant claimed expenses of $12,889.00 which the Senior Arbitrator found to be well above the normal expenses usually claimed by an employee.
- The Respondent did not deduct PAYG instalments from the funds deposited into the Appellant’s business account and there was no allowance for sick leave, annual leave or any superannuation payments made.
The Senior Arbitrator noted, having regard to the decision in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3)  FCA 366, that the critical question was whether the Appellant was working in the Respondent’s business or in his own at the time of the injury. Considering the evidence and the ‘totality of the relationship’ in accordance with Hollis v Vabu Pty Ltd (2001) HCA 44, he was satisfied on the balance of probabilities that the Appellant was undertaking work that was incidental to a trade or business regularly carried out by him for his Company. He also considered the issue of “control” and the right to dictate the place and hours of work, quoting from Zuijs v Wirth Brothers Pty Limited  HCA 73. He found minimal evidence, if any, of control over the Appellant’s activities. Accordingly, he made an Award for the Respondent
Grounds of Appeal
The Appellant lodged an Appeal against this decision on the following grounds:
- The Senior Arbitrator made an error fact and law in failing to find that the Appellant was a worker within the meaning of section 4 of the 1998 Act having regard to the evidence and the principles set out in On Call Interpreters;
- The Senior Arbitrator made an error of fact and law in treating one formal aspect of the relationship between the Appellant and the Respondent, being the invoices issued in the name of the Appellant’s Company, as decisive and failing to recognise that the work that was being performed by the Appellant at the time of his injury was as a subordinate worker performing duties under the control of and in the business of the Respondent, and as a representative of that business, not as an independent entrepreneur performing work for his own business, and as a representative of that business, and;
- The Senior Arbitrator made an error of fact and law in treating the fact that the Appellant had a business as decisive without examining whether, notwithstanding that the Appellant had a business, he was at the material time performing work for the Respondent.
The Appeal was dismissed by Acting Deputy President Geoffrey Parker SC who found that no error of fact or law had been made by the Senior Arbitrator. He noted that the assertion of a contrary view with respect to any piece of evidence did not establish that the Senior Arbitrator was incorrect to take the view that he took. He found that the Senior Arbitrator had not treated the presentation of the Appellant’s invoices or the existence of his own business as decisive. He noted that the Senior Arbitrator considered the various indicia identified in relevant authorities and on several occasions made the point that the arrangement between the Appellant and others, apart from the Respondent, was irrelevant to the matter.
This decision provides guidance in distinguishing between a worker and a contractor for the purposes of Section 4 of the 1998 Act. It confirms that it is necessary to consider the totality of the relationship between the claimed worker and employee and the available evidence. Whilst not decisive, whether an alleged worker has control over their place and hours of work is also an important consideration.