Loading...
Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

Wendt v Ipswich City Council

 

[2020] QIRC 2

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Wendt & Ors v Ipswich City Council [2020] QIRC 002

PARTIES: 

Wendt, Wayne Earl

(Applicant – TD/2018/86)

&

Tully, Paul Gregory

(Applicant – TD/2018/87)

&

Bromage, Cheryl Anne

(Applicant – TD/2018/88)

&

Pahlke, David Allen

(Applicant – TD/2018/89)

&

Morrison, David Henry

(Applicant – TD/2018/96)

&

Pisasale, Charles Francis

(Applicant – TD/2018/100)

&

Sheila, Ann Ireland

(Applicant – TD/2018/107)

v

Ipswich City Council

(Respondent)

PROCEEDING:

Application for Reinstatement

DELIVERED ON:

14 January 2020

HEARING DATES:

18 June 2019

MEMBER:

Knight IC 

HEARD AT:

Brisbane

ORDERS:

  1. The following applications are dismissed:

  • TD/2018/86 (Mr W Wendt)
  • TD/2018/87 (Mr P Tully)
  • TD/2018/88 (Ms C Bromage)
  • TD/2018/89 (Mr D Pahlke)
  • TD/2018/96 (Mr D Morrison)
  • TD/2018/100 (Mr C Pisasale)
  • TD/2018/107 (Ms S Ireland)

CATCHWORDS:

INDUSTRIAL LAW – APPLICATION FOR REINSTATEMENT – application in existing proceedings – application to dismiss for want of jurisdiction – where Applicants were elected as Councillors – where Council was dissolved – where Councillors no longer held office – where Applicant's filed application for re-instatement – whether Applicants are Councillors, employees or both – definition of employee – employment indicia -  section 317 of the IR Act.

LEGISLATION:

Industrial Relations Act 2016 (Qld)

Industrial Relations (Tribunals) Rules 2011 (Qld)

Local Government Act 2016 (Qld)

Local Government Regulation 2012 (Qld)

Local Government (Dissolution of Ipswich City Council) Act 2018 (Qld)

Taxation Administration Act 1953 (Cth)

Workers' Compensation and Rehabilitation Act 2003 (Qld)

Fringe Benefits Tax Assessment Act 1986 (Cth)

CASES

Abdalla v Viewdaze Pty Ltd t/a Malta Travel [2003] 122 IR 215

Hollis v Vabu Pty Ltd [2001] HCA 44

Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs [2018] QSC 96

On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366

APPEARANCES:

Mr A Morris QC, for the Applicants.

Mr A Herbert of Counsel, instructed by Ms M Lalovic of Wotton Kearney, for the Respondent.

Reasons for Decision

  1. [1]
    This is a decision in respect of an application in existing proceedings where the Applicants, who were previously Councillors of the Ipswich City Council, (the Council) have each filed an Application for reinstatement pursuant to section 317 of the Industrial Relations Act 2016 ("the IR Act").
  1. [2]
    The Respondent is seeking all seven applications be dismissed for want of jurisdiction, and/or on the basis the applications are statute barred.

Background

  1. [3]
    The applications for reinstatement were filed at varying times after the Parliament of Queensland passed the Local Government (Dissolution of Ipswich City Council) Act 2018. The passage of the legislation resulted in the dissolution of the Ipswich City Council and the appointment of an interim administrator to act in place of the Councillors, who are now the Applicants in the substantive proceedings.
  1. [4]
    The Applicants maintain the dismissal was motivated by "bad faith" and was harsh, unjust and unreasonable. In terms of remedy, they are seeking reinstatement to their former position and remuneration lost between the date the dismissal took effect and the date of reinstatement; or re-employment to another position that the Council has available; or an amount of compensation the Commission considers appropriate.
  1. [5]
    All eight applications for reinstatement were joined, by Order of the Commission, to be heard concurrently, following a Directions hearing on 7 February 2019. Several of the applications were filed out of time.
  1. [6]
    Shortly thereafter, representatives for the Council made an application which is now the subject of this decision.

Application Details

  1. [7]
    The Council contends an application for re-instatement under the IR Act can only be made by an employee. It is argued the Applicants were not employees of the Council at the time it was dissolved.
  1. [8]
    Instead, the Council submits the Applicants were Councillors elected to, and appointed to, the office of the Councillor by the people within the Ipswich local government area, pursuant to the Local Government Act 2009 (Qld) (LG Act).
  1. [9]
    The Council also contends the LG Act prevents a Councillor from concurrently holding a role as an employee.
  1. [10]
    The Applicants argue the dissolution of the Ipswich City Council and the appointment of an interim administrator forced their termination from their elected office, which in turn required the Council, as their employer, to "formally end the employment role of each of the Applicants."[1]
  1. [11]
    They maintain they were both Councillors and employees at the time of the dissolution. In support of their argument, the applicants rely on the treatment as employees under various Acts, as well as the manner in which they received remuneration, benefits and other tools of trade ordinarily enjoyed by employees.

Statutory Provisions & Issue to be Determined

  1. [12]
    One must be an employee in order to make an application for reinstatement under section 317 of the IR Act:

317  Application for reinstatement

  1. (1)
     If it is claimed that an employee has been unfairly dismissed, an application for reinstatement may be made to the commission for the dismissal to be dealt with under this part.
  1. (2)
    The application must be made within—
  1. (a)
    21 days after the dismissal takes effect; or
  1. (b)
    if the commission allows a further period on an application made at any time—the further period.
  1. (3)
    An application may be made by
  1. (a)
    an employee; or...
  1. [13]
    An employee is defined in s 8 of the IR Act as 'an individual who is employed, or usually employed, by an employer.' An employer is defined in s 7 of the IR Act as a person who is not a national system employer, and employs, or usually employs one or more individuals. It is not in contention that under this definition, the Ipswich City Council is an employer.
  1. [14]
    It follows that the issue at hand is whether the Councillors are individuals who are employed, or are usually employed, by the Council.

What is the nature of the relationship between the Council and the Councillors?

  1. [15]
    In so far as this decision relates to a determination as to whether the Applicants are holders of an appointment to a statutory office or if they are in fact, employees of the Council, or both (as argued by the Applicants), there is limited authority about the definition of an employee in a similar context.
  1. [16]
    There exists however, a wealth of cases concerned with evaluating an individual's employment status, in conjunction with relevant indicia of employment. Those cases almost invariably relate to distinguishing between whether an individual is an employee or independent contractor.
  1. [17]
    Helpfully, Justice Bromberg in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3),[2] (On Call) having undertaken an extensive review of the relevant case law relating to this area, explained that the starting point in the evaluation of whether an employment relationship exists, is in identifying who provides the labour, and who receives the benefit of said labour:

An analysis of the nature of a legal relationship should commence with a proper identification of the parties to that relationship, their role and function and the nature of the interactions which constitute their relations. The employment relationship classically contains two parties. A worker who provides his or her labour and an entity that receives the benefit of that labour. In an employment relationship, labour (being a combination of time, skill and effort) is traded for remuneration. Like many commercial relationships, there is a provider, a purchaser, an exchange and a contract containing the terms and conditions that regulate that exchange.

The exchange involves a form of hire. In return for payment, the time, skill and effort of the employee (the personal services) are provided to the employer for an agreed time or until the completion of an agreed task.[3]

  1. [18]
    Justice Bromberg went on to describe the multifactorial nature of the analysis of the relationship:

Despite the earlier preoccupation of the law with the degree of control exercised by the putative employer as defining an employment relationship, the modern approach is multi-factorial. As the majority said in Hollis at [24] it is "the totality of the relationship" which is to be considered. A range of indicia may be examined. Some will be more useful than others in some work arrangements but less useful in other work arrangements.[4]

  1. [19]
    The majority in Hollis v Vabu[5] considered several elements of the employment relationship between the parties in their joint judgment. In agreeing with elements of the majority's reasoning, Justice McHugh outlined some of the "classical tests" of employment:

(1) the employer's power of selection of his or her worker, (2) the payment of wages or other remuneration, (3) the employer's right to control the method of doing the work, and (4) the employer's right of suspension or dismissal: Short v J & W Henderson Ltd [1946] SC(HL) 24 at 33-34.

  1. [20]
    The starting point therefore in determining whether an employment relationship exists between the Council and the Applicants, is to examine the nature of their relationship and whether a reciprocal 'hire' arrangement and contract exist. It may then also be useful to consider the 'classical tests' including control, selection, remuneration and suspension/dismissal in so far as they relate to the circumstances in this matter. 

The Council   

  1. [21]
    The Council is a local government created by the LG Act. It is also a body corporate with perpetual succession which may sue and be sued in its name.[6]
  1. [22]
    To properly understand the nature and extent of the responsibilities and powers of the Council, it is useful to consider the statutory framework within which it has been established and operates. Helpfully, Byrne J recently considered the statutory framework in Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs:[7]

[9] Section 70 of the Constitution of Queensland 2001 (Qld) provides that there must be a system of local government in Queensland consisting of "a number of local governments". By s 71, a local government is an "elected body that is charged with the good rule and local government of a part of Queensland allocated to the body" and "another Act … may provide for the way in which a local government is constituted and the nature and extent of its functions and powers". The other Act that so provides is, relevantly, the LGA.

[10]  The purposes of the LGA are to provide for "the way in which a local government is constituted and the nature and extent of its responsibilities and powers" and "a system of local government in Queensland that is accountable, effective, efficient and sustainable": s 3.

[11]  The LGA goes on to provide that a local government is an elected body that is responsible for the good rule and local government of a part of Queensland (s 8(1)) and that each local government created under the LGA has the power to do anything that is necessary or convenient for the good rule and local government of its local area (s 9). Section 12 then sets out the responsibilities of Councillors as well as the Mayor. Unsurprisingly, they include responsibilities on the part of all Councillors (including the Mayor) to comply "with all laws that apply to local governments" (s 12(3)(a)(iii)) and to "serve the overall public interest of the whole local government area" (s 12(6)).

[12]  Chapter 5 of the LGA is concerned with monitoring and enforcing the laws that apply to local governments.

  ... 

[13]  Relevantly, s 122 of the LGA empowers the Minister to suspend or dismiss a Councillor if the Minister "reasonably believes that a Councillor has seriously or continuously breached the local government principles" (s 122(1)(b)) or "reasonably believes that a Councillor is incapable of performing their responsibilities" (s 122(1)(c)).

  1. [23]
    Chapter 6 of the LG Act is titled "Administration" and contains provisions about persons who are elected or appointed to perform responsibilities under the Act; and bodies that are created to perform responsibilities under the LG Act. Notably, Part 2 of Chapter 6 is titled "Councillors", whereas Part 5 of Chapter 6 is titled "Local Government Employees".

A Councillor

  1. [24]
    The LG Act provides for a regulation to fix the number of Councillors for a local government and any divisions of the local government area.[8] In turn, Councillors are elected by the public in the relevant area (in this case, Ipswich) to form part of a body that is responsible for the good rule and local government of area.
  1. [25]
    Section 12 of the LG Act provides that a Councillor must represent the current and future interests of the residents of the local government area. In performing their responsibilities, the LG Act requires Councillors to serve the overall public interest of the whole of the local government area.
  1. [26]
    Councillors' responsibilities include providing high quality leadership to the local community, participating in council meetings, policy development and decision making for the benefit of the local government area.[9]
  1. [27]
    The business of the Council, when it involves making decisions in respect of policy and other matters impacting the local government area, is required to be conducted at a quorate meeting of the Councillors. Voting must be open and a question in respect of Council business is decided by a majority of the votes of the Councillors who are present.[10]
  1. [28]
    Putting to one side the body corporate status of the Council, in a practical sense, the Councillors essentially become the Council in that they are require to make decisions for the local government area that are in turn, implemented by other parties, including local government employees.
  1. [29]
    The LG Act provides that a Councillor's term (other than if they are appointed due to a vacancy) commences on the day after the conclusion of the Councillor's election and ends, in circumstances including, amongst other events, the Legislative Assembly ratifying a dissolution of the Council under section 123 of the LG Act or when the Councillor's office becomes otherwise vacant.[11]
  1. [30]
    Notably, section 162(1)(h) of the LG Act provides that if a person is a Councillor, and becomes an employee of a local government, the person's appointment to office as a Councillor comes to an end.
  1. [31]
    Section 122 of the LGA empowers the Minister to recommend the Governor In Council suspend or dismiss a Councillor in particular circumstances. Division 2 of Part 3 of Chapter 5A deals with complaints about the conduct and performance of Councillors.[12] The two types of conduct considered are misconduct;[13] and 'inappropriate conduct',[14] which is generally dealt with by an Independent Assessor, a person nominated by the Governor in Council.[15] [16]

Councillor Remuneration and Other Benefits

  1. [32]
    The nature and level of remuneration to be paid to Councillors is determined by the LG Act. Regulation 247 provides that the local government must pay its Councillors. The amount of remuneration for each Councillor, other than a mayor or deputy mayor, must be the same. The maximum remuneration is payable, unless a lesser amount is decided by resolution.
  1. [33]
    During the proceedings, one of the Applicants, Mr Tully, stated to the Commission he received remuneration 'in the form of a salary from which Pay As You Go (PAYG) tax was deducted by the Council and forwarded to the tax office", while he was a Councillor at Ipswich City Council.[17]
  1. [34]
    Mr Tully maintains he also received a pay slip each week which, among other things, included the following headings:
  • Employee – followed by the Councillor's name beside it;
  • A payroll number;
  • Taxable earnings;
  • LG Super Employee Accum Pre Tax;
  • Post Tax Deductions;
  • ICC Social Club Payment;
  • Employer Superannuation Contributions (LG Super).
  1. [35]
    Ms Lisa Lobley, a payroll systems officer employed by the Council since 2003, stated that from 2007 to 2018 the Council has utilised an "out of the box" payroll solution which provides limited options in terms of pay delivery and pay documentation precedents, namely:
  1. (a)
    "Upon command, the Payroll System automatically generates payslips that display:
  1. (i)
    The name of the person to whom the payslip is addressed together with the word "Employee" beside the name of the individual;
  2. (ii)
    An automatically generated pay number for each person entered within the Payroll System (regardless of the chosen term referenced at paragraph 7(b) below); and
  3. (iii)
    "Pre" and "Post" taxc deductions depending on what each individual nominates (including references to Super as per the below).
  1. (b)
    The reason that the payslips issued to Applicants state the word "employee" followed by the individual's name is simply a function of the Payroll System. At the point an individual's pay details are entered into the Payroll System there only three (3) options with respect to the payee's identifying label which will ultimately appear on their Payslip. Those are:
  1. (i)
    "Applicant" which is a provisional label the Respondent relied upon in the past to enter details relevant to job Applicants;
  2. (ii)
    "Contingent Worker" which is a label selected for persons engaged by Counsel whom would never receive direct payment(s) by the Respondent (i.e labour hire); and finally
  3. (iii)
    "employee", which for payroll purposes, represents a generic label for anyone paid directly by Council.
  1. (c)
    The options described in paragraph 7(b)(i) and (ii) above do not generate a payslip. The Payroll System will only generate a payslip if the option at paragraph 7(b)(iii) is selected.
  2. (d)
    The standard, template form generated by the Payroll System also includes the other words referred to by Mr Tully in paragraph 8 of his Affidavit (such as 'LG Super Employee Accum Pre Tax' and 'Employer Superannuation Contributions').[18]
  1. [36]
    Mr Tully stated that each year he would receive a PAYG payment summary for an individual, non-business, from the Council. He was also provided with a letter from the Payroll Officer at Ipswich City Council attaching a final payslip and noting:

Please find attached your final payslip for your employment with Ipswich City Council.[19]

  1. [37]
    Mr Tully's evidence is that Councillors were also provided with the use of a motor vehicle, mobile phone, fully equipped office and administrative staff to assist the Councillor to perform their duties.[20] 
  1. [38]
    Mr Tully maintains he was subject to employee fringe benefits tax, and enjoyed the benefit of being governed by the Queensland Workers' Compensation Scheme which applies to all council employees. He also received superannuation contributions in accordance with the standard percentage paid to other Council employees.[21]

Local Government Employees

  1. [39]
    Chapter 6, section 196 (2) of the LG Act provides the Council with the power to employ 'local government employees' for the performance of the local government's responsibilities.
  1. [40]
    Schedule 4 of the LG Act defines "Local government employee" as:
  1. (a)
    the chief executive officer; or
  2. (b)
    a person holding an appointment under section 196.
  1. [41]
    The LG Act requires the Council to appoint a chief executive and makes it clear that all employees of the council are appointed by the chief executive officer, other than senior executive employees.
  1. [42]
    Senior executive employees are appointed by a panel including the mayor, the chief executive and either a Councillor (where they are the chairperson of the only committee to which the senior executive will report) or the deputy mayor (who may choose to delegate the function to another Councillor).[22]
  1. [43]
    Although the mayor may give direction to the chief executive officer or senior executive employees, no Councillor (including the mayor) may give a direction to any other local government employee.[23] 
  1. [44]
    The responsibilities of local government employees are set out in the LG Act and include implementing policies and priorities of the council, providing sound and impartial advice to the council and observing all laws relating to their employment (my emphasis).[24]
  1. [45]
    The LG Act provides that a local government employee may be employed by more than one council at the same time, provided that each council agrees to the arrangement.[25]
  1. [46]
    If a person is an employee of a Council and becomes a Councillor, the person is taken to have resigned as a local government employee on the day before the person becomes a Councillor.[26]
  1. [47]
    Separately, there are specific provisions within the LG Act and accompanying Regulations, which set out when and how disciplinary action may be taken against local government employees by the Chief Executive.[27]
  1. [48]
    Subject to the role being undertaken, the terms and conditions of Local Government employees (including remuneration) are generally derived from relevant state award(s), industrial agreements and common law contracts.

Consideration

Are the Applicants 'local government employees' as defined under the Local Government Act 2009 (Qld)?

  1. [49]
    Local government employee is defined as:
  1. (a)
    the chief executive officer; or
  2. (b)
    a person holding an appointment under section 196.[28] 
  1. [50]
    The Council submits the Applicants are not "local government employees" under the LG Act because:
  1. (a)
    they were not employed by the Respondent;
  2. (b)
    there was no employment contract between the Respondent and any of the Applicants; and
  3. (c)
    the Applicants were elected to the office of Councillor by the people of Ipswich and their election and not any indicia of any employment contract.
  1. [51]
    In support of its position, the Council points to the restrictions under the LG Act on Councillors directing local government employees,[29] the persistent differentiation in the LG Act between local government employees and Councillors, as well as sections 162(1)(h) and s(167(1) of the LG Act which, it maintains, clearly imply that a Councillor cannot concurrently be an employee of the relevant local government and vice versa.
  1. [52]
    The Applicants maintain the definition within the LG Act has no bearing on the real issue that must be determined in this matter, being whether the Applicants were employed by the Council, having regard to the classical tests often applied when distinguishing, for example, between an employment and independent contractor arrangement.[30]
  1. [53]
    That is, the term 'local government employee' is simply a definition within the LG Act to define "a particular type of employee who is usually engaged by the chief executive and who are subject to a standard employer/employee relationship."
  1. [54]
    Having regard to the submissions of both parties, I am satisfied the Applicants in this matter do not fall within the definition of 'local government employee' as it is set out in the LG Act, during the time they were in office, in circumstances where:
  • they were not appointed to the position of CEO;
  • there was no employment contract (verbal or otherwise) entered into between the Council and the Applicants;
  • they were not appointed by the Chief Executive as a local government employee;
  • they were elected to the office of Councillor and their responsibilities and remuneration are derived from the LG Act.
  1. [55]
    In my view ss 162 and 167 of the LG Act also operate to exclude a Councillor from concurrently being a 'local government employees' while serving as a Councillor.[31] 
  1. [56]
    Putting to one side my findings as to whether the applicants fall within the definition of 'local government employee' as set out in the LG Act, the Applicants in this matter argue it is important for the Commission to consider the real substance of the relationship between the Councillors and the Council, rather than relying solely on the definition contained in the LG Act as a means of precluding the Applicants from pursuing an application for re-instatement.
  1. [57]
    Certainly, it can be the case that a relationship will not always be such as it is labelled.[32]

Did the Councillors and the Council have an employment relationship?

  1. [58]
    The Respondent submits the fundamental difficulty for the Applicants, in respect of the argument that they were both Councillors and employees, is that the relationship between the Council and its Councillors lacks the reciprocity of hire that is considered in On Call.[33] That is, there is an absence of the relevant parties (i.e. a recipient) and circumstances that would ordinarily feature in an  agreement to exchange time, skill and effort in return for payment. 
  1. [59]
    It is well accepted that factors such as the reciprocal and commercial nature of an interaction between two parties are relevant when considering whether an employment relationship exists. Where an employment arrangement does exist, there is generally a provider, a purchaser, an exchange and a contract containing the terms and conditions that regulate that exchange.[34]
  1. [60]
    The Applicants argue they were recognised and treated as employees by the Council at all material times until it was dissolved by the Queensland Parliament.[35]
  1. [61]
    The difficulty I have with the Applicants' arguments in this matter, is that several of the core attributes of an employment relationship identified by Justice Bromberg in On Call, namely a purchaser, an exchange (between the parties) and a contract, that would normally be present in an employment relationship, appear to be missing, in a setting where:
  • There is no evidence before the Commission which indicates the Council had taken any steps to 'hire' the services or engage the labour of Councillors during the period the Councillors held office. Although I accept there are instances, where a person may be both elected to and employed in a position (for example, a paid union official), there is no evidence that occurred in this matter;
  • That is, the Applicants have been unable to provide the Commission with any evidence suggesting the parties negotiated, at any stage, an employment contract (verbal or otherwise) in return for the provision of services or labour. In any event, it appears that such an arrangement would be inconsistent with the Councillor's obligations at section 12 of the LG Act to serve the overall public interest;
  • The nature and level of remuneration for Councillors is determined by the LG Act. For example, under regulation 247, the local government must pay its Councillors. The amount of remuneration for each Councillor, other than a mayor or deputy mayor, must be the same. The maximum remuneration is payable, unless a lesser amount is decided by resolution. Essentially, the Council has limited (if any) control over the level of remuneration paid to Councillors;
  • The Councillors are ordinarily elected by the public. The Council itself has no control over the persons elected to represent the local government area, nor is it able to directly dismiss a Councillor from office;
  • Although it is not uncommon for local government employees to provide advice or guidance to elected office holders, the Council has limited (if any) ability to control or direct Councillors in the performance of their role and responsibilities – the Council is restricted in its capacity to delegate the right to do things or the right to make decisions. Instead, the Councillor's responsibilities and powers are derived from the LG Act;
  • Section 122 of the LG Act empowers a Minister to recommend that the Governor in Council suspend or dismiss a Councillor or dissolve a local government. On the other hand, no similar power is afforded to a local government to suspend or dismiss a Councillor;
  • Section 120 outlines the precondition that the relevant Minister issue a notice to the local government or Councillor in question prior to taking any remedial action. Section 120(6) details that should no response to that notice be received, or that response is unsatisfactory, the Minister may exercise the power without further notice to the local government or Councillor. Therefore, not only is the Council not able to terminate a Councillor, it is largely powerless to intervene and halt a Councillor's dismissal.
  1. [62]
    When considering the roles, functions and interactions between the Council and Councillors, it is clear:
  1. (a)
    there is limited power on the part of the Council to select and appoint Councillors;
  1. (b)
    the Council is prevented from negotiating terms and conditions of employment in circumstances where the nature and level of remuneration is prescribed by the LG Act;
  1. (c)
    although I accept the Chief Executive or their delegate may provide guidance and advice to Councillors from time to time, the Council has limited capacity to directly determine and control the role and responsibilities of Councillors; and
  1. (d)
    the Council has no capacity to directly dismiss a Councillor.
  1. [63]
    Having measured those circumstances against the key attributes set out by Justice Bromberg in On Call,[36] I am not satisfied an employment relationship existed between the Council and the Applicants, at the time the Council was dissolved.
  1. [64]
    It follows then, that the Applicants cannot be characterised as employees for the purposes of section 317 of the IR Act.

Indicia of Employment

  1. [65]
    As touched on above, the Applicants in this matter have implored the Commission to consider the real substance of the relationship between the Council and the Councillors. In support of the argument they concurrently filled the roles of both Councillor and employee, the Applicants rely heavily on tests ordinarily considered when distinguishing between an employee and an independent contractor.
  1. [66]
    The Applicants have also pointed to the manner in which their interaction with the Council was characterised under other Acts. Although not strictly necessary given my findings above, I have chosen to address these submissions below.

Treatment under other Acts

  1. [67]
    By way of purported treatment or characterisation of the Councillors as employees under other Acts, the Applicants maintain they are employees in circumstances where:
  1. (a)
    On or around June 2000, Mr Tully contends the Council passed a unanimous resolution in accordance with s 446-5 of the Taxation Administration Act 1953 (Cth) which was notified to the Commissioner of Taxation. The Council was declared to be an "eligible governing body" whose members were treated as employees. As a result, the Councillors are considered employees for superannuation and tax purposes. It is argued the Council has treated the Applicants as employees in respect of income tax, fringe benefits tax and salary sacrificing; and
  1. (b)
    The Councillors were treated as employees under the Workers' Compensation and Rehabilitation Act 2003 (Qld) s 68B(4) and were able to access Workers' Compensation.
  1. [68]
    In my view, the Respondent is correct in its submissions the provisions identified merely treat the Councillors as employees in order to access the benefit of the aforementioned Acts. It doesn't necessarily follow that a broadening of a definition within other Acts, resulting in a Councillor being afforded the same benefits or treatment as an employee, equates to a conclusion that a Councillor is also an employee for the purposes of section 317 of the IR Act.
  1. [69]
    Section 446-5 of the Taxation Administration Act 1953 (Cth) provides for the remuneration of members of a local government to be subject to PAYG withholding by way of a resolution. Section 446-1 details that the purpose of the resolution is to subject the remuneration of Councillors to income tax, and 'also results in the members being treated as employees for a wide range of other taxation purposes.' As a result, the Respondent provided PAYG payment summaries to the Applicants.
  1. [70]
    The resolution made is limited in operation. It goes only so far as to resolve that the Applicants are treated as employees for a variety of taxation purposes. The Respondent submits that the resolution would be entirely unnecessary should Councillors have been employees in the first instance. I agree.
  1. [71]
    Section 136(1) of the Fringe Benefits Tax Assessment Act 1986 (Cth) adopts an extended definition of employment for the purposes of that Act. The extended definition includes persons who hold 'any office or appointment', which encompasses the role of Councillor. Simply holding any office or appointment, however, is not an indication of being an employee under the IR Act.
  1. [72]
    Likewise, I do not consider the payment of superannuation and the capacity to salary sacrifice relevant indicia, in this matter, that the parties are in an employment relationship. Section 226 of the LG Act authorises a council to take part in a superannuation scheme and provides for a salary sacrifice arrangement. It is relevant that the section differentiates the Councillors from local government employees in legislating for such outcomes.
  1. [73]
    Lastly, that the Workers' Compensation and Rehabilitation Act 2003 (Qld) provides that in the application of the definition of injury to a Councillor, the local government to which the Councillor is elected, is taken to be that Councillor's employer.[37]
  1. [74]
    It is not uncommon for certain occupations or office holders, irrespective of whether they are an employee, a volunteer or involved in some other commercial arrangement to be deemed workers for the purposes of workers compensation insurance. For example, the Workplace Injury Management and Workers Compensation Act 1998 (NSW) deems entertainers and referees as employees, notwithstanding they may not be considered an employee in any other sense.
  1. [75]
    In the circumstances of this matter, the legislative provision relied on by the Applicants does not, in my view, have the effect of rendering Councillors to be employees of the local government, merely because the definition is broadened.

Other

  1. [76]
    The Applicants submit that several other circumstances illustrate they were treated as employees by the Council, including:
  1. (a)
    the payslips provided to the Councillors confirm their status as employees;
  2. (b)
    each Councillor was provided with the usual tools of the trade and equipment such as mobile phones, motor cars and the like, at the expense of the Respondent;
  3. (c)
    Each Councillor extensively advertised each person's place of work (their electoral office) with signage paid for by funds provided by the Council;
  4. (d)
    The Council provided Councillors with business cards and the work did not involve a profession, trade or distinct calling on the part of the Applicants;
  5. (e)
    The work undertaken by the Applicants created goodwill for the Council;
  6. (f)
    The Applicants were subject to extensive direction of the CEO on issues such as office hours and staffing;
  7. (g)
    The Applicants were subject to Council policies and procedures on various matters, including, for example, the use of the internet, bullying, harassment and discrimination.
  8. (h)
    That the inability of the Councillors to give direction to government employees is not an indication that the Councillors were not employees. Many employees cannot give directions to others in their role.
  1. [77]
    I do not find any of these purported indicia to be persuasive, and have dealt with these matters below:
  1. (a)
    I accept Ms Lobley's evidence that the payslips, for the most part, were automatically generated via an 'out of the box' payroll system with limited scope to create a record of remuneration, tax and other deductions purely for Councillors in circumstances where they were treated as employees for a variety of taxation purposes.
  1. (b)
    I also accept that on the dissolution of the Council, the Applicants, as a courtesy, were sent a record of their final payment with an accompanying standard form letter confirming the cessation of their employment, which was automatically generated within the payroll department.
  1. (c)
    In the circumstances of this matter, I do not consider the text on a payslip or the letter accompany the payslip to be of much evidentiary value as to the relationship between the parties. I accept the Council payroll system and the automatic processes which generated payslips and accompanying documentation were largely generic and unable to accommodate the unique circumstances of an elected office holder, such as a Councillor.
  1. (d)
    Having said that, I note the payslips provided to the Commission contained no record of annual leave, sick leave or other entitlements one would ordinarily expect to see in the event a person was recognised and treated as a salaried employee as claimed by the Applicants;
  1. (e)
    It is also not unusual for persons who are appointed to an office, including Members of Parliament or Company Directors, to be provided with a record of payment, along with an office and 'tools of the trade' such as a mobile phone, business card or car in the discharge of their duties.
  1. (f)
    It is also not uncommon for relevant workplace policies, including the use of the internet or safety requirements to apply to such persons. By way of example, Section 150D of the LG Act provides for the making by the Minister, of a Code of Conduct 'that sets out the standards of behaviour for Councillors in performing their functions under the LG Act. The Code provides, inter alia, that Councillors will (at a minimum), 'Respect and comply with all policies, procedures and resolutions of [the relevant] Council'.[38]  A request that all Councillors respect and comply with policies, does not automatically equate to a scenario whereby a Councillor could be deemed to be an employee.

Conclusion

  1. [78]
    I am satisfied on the facts and circumstances in this case, an employment relationship between the Councillors and the Council did not exist at the time the Ipswich City Council was dissolved.
  1. [79]
    There is no evidence before the Commission that the applicants or the Council entered into any form of contract establishing the terms and conditions of any exchange of skill, time or effort in return for payment.
  1. [80]
    I am not persuaded the Council was an employer of the Councillors at the time of the dissolution, nor do I consider the Applicants in this matter could be accurately characterised as employees for the purposes of section 317 of the IR Act.
  1. [81]
    I am satisfied the Applicants are precluded from seeking reinstatement.

Order

  1. [82]
    The following applications for re-instatement are dismissed for want of jurisdiction.
  • TD/2018/86 (Wayne Earl Wendt)
  • TD/2018/87 (Paul Gregory Tully)
  • TD/2018/88 (Cheryle Anne Bromage)
  • TD/2018/89 (David Allen Pahlke)
  • TD/2018/96 (David Henry Morrison)
  • TD/2018/100 (Charles Francis Pisasale)
  • TD/2018/107 (Sheila Ann Ireland)
  1. [83]
    I order accordingly.

Footnotes

[1]Submissions of the Applicants, paragraph 1.

[2]On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366.

[3]Ibid 201 -202.

[4]Ibid 204.

[5]Hollis v Vabu Pty Ltd [2001] HCA 44.

[6]Local Government Act 2009 (Qld) s 11.

[7]Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs [2018] QSC 96.

[8]Local Government Act 2009 (Qld) s 8.

[9]Ibid s 12.

[10]Local Government Regulation 2012 (Qld) s 260.

[11]Local Government Act 2009 (Qld) SS 159 – 160.

[12]Ibid ss 150O – 150Q.

[13]Ibid s 150L.

[14]Ibid s 150K.

[15]Ibid ss 150CV, 150R, 150S.

[16]At the relevant time, Division 6 of the LG Act dealt with complaints about the conduct and performance of Councillors – see ss 176 – 182) and also provided for "inappropriate conduct to be dealt with by the Mayor or the Chief Executive of the Department (see s 176(2). Since then the Local Government (Councillor Complaints) and Other Legislation Amendment Act 2018 has been passed by the Queensland parliament and commenced 6 December 2018.

[17]Exhibit 2, paragraph 5.

[18]Exhibit 5, paragraph 7.

[19]Exhibit 2, Attachment PGT 1.

[20]Exhibit 2.

[21]Ibid.

[22]Local Government Act 2009 (Qld) ss 194, 196.

[23]Ibid s 170.

[24]Ibid s 13.

[25]Local Government Act 2009 (Qld) s 198.

[26]Ibid s 167(1).

[27]Ibid s 197; Local Government Regulations 2012 (Qld) Chapter 8 Administration, Part 3 Local Government Employees.

[28]Local Government Act 2009 (Qld) sch 4.

[29]Ibid s 170.

[30]T1-6-7.

[31]Local Government Act 2009 (Qld) ss 162, 167.

[32]Abdalla v Viewdaze Pty Ltd t/a Malta Travel [2003] 122 IR 215.

[33]On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366.

[34]Ibid.

[35]Submissions of the Applicants, paragraph 12.

[36]On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366, 201-202.

[37]Workers' Compensation and Rehabilitation Act 2003 (Qld) s 68B(4).

[38]Code of Conduct for Councillors in Queensland, page 6, 'Responsibilities', item 1.2.

Close

Editorial Notes

  • Published Case Name:

    Wendt & Ors v Ipswich City Council

  • Shortened Case Name:

    Wendt v Ipswich City Council

  • MNC:

    [2020] QIRC 2

  • Court:

    QIRC

  • Judge(s):

    Knight

  • Date:

    14 Jan 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
Help

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.