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Baigorri v Workers' Compensation Regulator[2024] ICQ 2

Baigorri v Workers' Compensation Regulator[2024] ICQ 2

INDUSTRIAL COURT OF QUEENSLAND

CITATION:

Baigorri v Workers’ Compensation Regulator [2024] ICQ 2

PARTIES:

HORACIO AUGUSTO BAIGORRI

(Appellant)

v

WORKERS’ COMPENSATION REGULATOR

(Respondent)

FILE NO/S:

C/2023/30

PROCEEDING:

Appeal

DELIVERED ON:

28 February 2024

HEARING DATE:

30 November 2023

MEMBER:

Davis J, President

ORDERS:

  1. 1.The appeal is allowed.
  2. 2.The orders made in the Queensland Industrial Relations Commission on each of 22 June 2023 and 11 July 2023 are set aside.
  3. 3.The appellant’s claim for compensation is remitted to WorkCover to be considered according to law.
  4. 4.By 4pm on 6 March 2024 the appellant shall serve written submissions on costs of the proceeding before the Queensland Industrial Relations Commission and this Court.
  5. 5.By 4pm on 13 March 2024 the respondent shall file written submissions on costs in reply.
  6. 6.Each party may file and serve an application in existing proceedings to make oral submissions on costs by 4pm on 20 March 2024.
  7. 7.In the absence of any application to make oral submissions being filed by 4pm on 20 March 2024 the question of costs will be dealt with on the papers without oral submissions.

CATCHWORDS:

WORKERS’ COMPENSATION – ENTITLEMENT TO COMPENSATION – PERSONS ENTITLED TO COMPENSATION – WHO IS A WORKER OR EMPLOYEE – where the Appellant contracted with Allied Express Transport Pty Ltd (Allied) to provide courier services – where by the contract the Appellant was a “contract carrier” – where by the terms of the contract the Appellant provided and maintained a vehicle – where the Appellant conducted no courier business before he contracted with Allied – whether he was a “contractor” – whether the work to be done pursuant to the contract with Allied was incident to a business regularly carried on by the Appellant – whether the work performed pursuant to the contract constituted a business – whether the Appellant was a worker

LEGISLATION:

Industrial Relations Act 2016 s 557

Superannuation Guarantee (Administration) Act 1992 (Cth) s 12(1), s 12(3)

Vocational Education, Training and Employment Act 2000 s 11, s 12.

Workers Compensation and Rehabilitation Act 2003 s 7, s 11, s 561, sch 2, sch 6.

CASES:

ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146 cited

Alcan (NT) Aluminia Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 cited

Baigorri v Workers’ Compensation Regulator [2023] QIRC 190 related

Baigorri v Workers’ Compensation Regulator (No 2) [2023] QIRC 201 cited

Byrne v Australian Airlines Ltd (1995) 185 CLR 410 cited

Cam v Cousins Interstate Transport Pty Ltd [1964] NSWR 1288 cited

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 cited

Ex parte McLean (1930) 43 CLR 472 cited

Higgins v Jackson (1976) 135 CLR 174 related

Hollis v Vabu Pty Ltd (2001) 207 CLR 21 considered

Humberstone v Northern Timber Mills (1949) 79 CLR 389 followed

Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 followed

K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 cited

Kovacic v Henley Arch Pty Ltd (2009) 22 VR 21; [2009] VSCA 56 cited

L&B Linings Pty Ltd v WorkCover Authority of New South Wales [2011] NSWSC 474 followed

Marshall v Director-General, Department of Transport (2001) 205 CLR 603 cited

Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Thornton (2023) 97 ALJR 488 cited

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited

R v A2; R v Magennis; R v Vaziri (2019) 269 CLR 507 followed

SAS Trustee Corporation v Miles (2018) 265 CLR 137 cited

SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 cited

Toowoomba Demolition and Earthmoving Pty Ltd ATF Castle Family Trust v Workers’ Compensation Regulator [2020] QIRC 30 cited

Turay v Workers’ Compensation Regulator (2023) 326 IR 28 cited

Unions NSW v New South Wales (2019) 93 ALJR 166 cited

University of London Press Ltd v University Tutorial Press Ltd  [1916] 2 Ch 601 cited

Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537 cited

COUNSEL:

M Horvath with D Payard for the Appellant

PB O'Neill for the Respondent

SOLICITORS:

AMK Lawyers for the appellant

Mr O'Neill was directly briefed by the Workers’ Compensation Regulator

  1. [1]
    Horacio Augusto Baigorri appeals the decision of the Queensland Industrial Relations Commission[1] which upheld a decision by Workers’ Compensation Regulator (the Regulator) to deny him compensation under the Workers Compensation and Rehabilitation Act 2003 (WCR Act).
  2. [2]
    The appeal is brought under s 561 of the WCR Act.  It is an appeal by way of rehearing as that term is generally understood and is not limited by s 557 of the Industrial Relations Act 2016 to errors of law or jurisdiction.[2]  Here, the facts are not in dispute and the decision of the QIRC primarily turned on the construction of provisions of the WCR Act.

The facts

  1. [3]
    Allied Express Transport Pty Ltd (Allied) operates a carrier transport business.
  2. [4]
    Mr Baigorri was for a number of years employed by a company called Technofibre.  He sustained an injury while working and, upon his return to work, learned that Technofibre had relocated its business to Western Australia.  Mr Baigorri declined an offer of employment in Western Australia. 
  3. [5]
    By late 2014 Mr Baigorri was looking for other employment.  For various personal reasons, he thought he would turn to courier driving.  He made enquiries of a company other than Allied but that came to nothing.  He did though, acquire a van and some other equipment for use as a courier.
  4. [6]
    Allied advertised for drivers and Mr Baigorri responded.  Mr Baigorri signed a contract with Allied.  By that point, he had not done any work as a courier.
  5. [7]
    The general structure of the contractual arrangements is;
    1. Mr Baigorri is a “contract carrier” (Recital B);
    2. Allied contracts with its customers to arrange for a contract carrier to courier their goods (Recital A);
    3. Mr Baigorri is an “independent contractor” (clause 8.1);
    4. Allied will allocate the performance of its contracts of carriage with its clients to Mr Baigorri (and no doubt others) (clause 3.1(a));
    5. Mr Baigorri is to provide and maintain a vehicle for his use as a contract carrier (clauses 3.2 – 3.7); and
    6. Allied will pay prescribed rates of remuneration to Mr Baigorri as a contract carrier (clause 4.1).
  6. [8]
    The clear intention of the contract is that Mr Baigorri will only perform work for Allied, at least with the vehicle he supplies, in order to fulfil his obligations under the contract.  In particular;
    1. he must wear an Allied uniform (clause 2.1); and
    2. the vehicle may be painted, signed and fitted with decals “in Allied Express’s colours” and at Allied’s discretion (clauses 3.20 and 4.6).
  7. [9]
    Mr Baigorri, as a contract carrier, is in many ways under the direction and control of Allied;
    1. he must wear an Allied uniform (clause 2.1) and other nominated clothing (clause 2.4);
    2. he must perform the work himself rather than through any employee, unless consent is obtained from Allied (clause 3.8);
    3. he must provide nominated paperwork, together with “any other document(s) reasonably requested by Allied Express” (clauses 3.1 and 3.25);
    4. Allied may fit signs to Mr Baigorri’s vehicle (clauses 3.20 and 4.6).  That is at Allied’s “discretion” (clauses 4.4(d) and 4.5);
    5. Allied may paint and otherwise decorate the outside of Mr Baigorri’s van as its sees fit (clause 4.6);
    6. the allocation of contracts of carriage is in the discretion of Allied (clause 3.1)[3]; and
    7. either party may terminate the contract at will; Allied may do so on only 7 days’ notice (clause 11.2).
  8. [10]
    Various provisions concern personal insurance:
    1. Mr Baigorri must maintain a personal accident and sickness policy in a sum not less than $100,000 (clause 5.1(c));
    2. Mr Baigorri must maintain a worker’s compensation insurance policy covering him and any employees (clause 5.2(c) and clause 3.8).
  9. [11]
    From the time Mr Baigorri commenced couriering for Allied he only delivered parcels for Allied.  Over the period from commencement with Allied, Mr Baigorri’s activities demonstrated various incidents of conducting a business, as was explained by the QIRC in these terms:
  1. “[107]
    Mr Baigorri’s evidence was that:
  • the Mercedes Vito van was his vehicle and it was being used in his business;
  • he claimed, as a business expense on his tax returns, the cost of maintenance and repairs for the vehicle;
  • he claimed depreciation on the vehicles he used over time;
  • he received a fuel tax credit from the ATO because his vehicles was being used in his business;
  • he had an accountant acting for the business who presented the paper work to the ATO;
  • Allied gave him a tax invoice in respect of the work he performed;
  • he claimed all relevant business expenses and depreciation;
  • for the 2021 financial year:
  1. in addition to ordinary business income, he declared fuel tax credits, the sale of a truck and the rent of a truck as business income; and
  2. he claimed business expenses, including, but not limited to motor vehicle expenses, advertising, insurance and mobile phone;
  • he used an ABN in respect of the work he did pursuant to the contract with Allied, and, over the period of that work, he collected GST on sales and claimed GST credits on purchases;
  • he bought a second truck ‘… to upgrade the business’; and
  • for a period of time in 2020, took out workers’ compensation insurance under the Act because he was ‘… going to – hire my friend and it didn’t work out because he got a job.”[4] (footnotes omitted)
  1. [12]
    None of those findings by the QIRC are contested on appeal.
  2. [13]
    Part of the arrangement with Allied was for Mr Baigorri to collect parcels from Allied’s warehouse at Rocklea.
  3. [14]
    On 9 February 2021, Mr Baigorri was at the warehouse sorting through stacked items to locate those which he was to deliver.  Items fell on him, injuring his left shoulder and lower back.
  4. [15]
    Mr Baigorri made claim for workers’ compensation as a result of his injuries.  The application has some history, but in summary;
    1. on 4 June 2021, WorkCover rejected the claim, finding that he was not a “worker”;
    2. on 23 November 2021, the Regulator confirmed WorkCover’s decision;
    3. on 22 June 2023, the QIRC dismissed Mr Baigorri’s appeal from the decision of the Regulator;[5] and
    4. Mr Baigorri appealed the QIRC’s decision to this Court.

Relevant statutory provisions

  1. [16]
    The WCR Act sets up a scheme to provide compensation for “workers” who are injured at work.  The scheme pivots on the definition of “worker”.  Section 11 of the WCR Act defines “worker” as:
  1. 11
    Who is a worker
  1. (1)
    A worker is a person who –
  1. (a)
    works under a contract; and
  2. (b)
    in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cwlth), schedule 1, part 2-5.
  1. (2)
    Also, schedule 2, part 1 sets out who is a worker in particular circumstances.
  2. (3)
    However, schedule 2, part 2 sets out who is not a worker in particular circumstances.
  3. (4)
    Only an individual can be a worker for this Act.”
  1. [17]
    The term “contract” is not defined.  The term “contract of service” is defined in an inclusive, but not exhaustive way, and is as follows:

contract of service includes an apprenticeship contract or traineeship contract under the Vocational Education, Training and Employment Act 2000.[6]

  1. [18]
    The term “contract of service” is well known to the law.  It arises for consideration not only in industrial disputes but also in copyright cases.  It is usually distinguished from a contract for services.  A satisfactory consideration of the meaning of “contract of service” was given in University of London Press Ltd v University Tutorial Press Ltd[7] where it was explained:

“… The meaning of the words ‘contract of service’ has been considered on several occasions, and it has been found difficult, if not impossible to frame a satisfactory definition for them. In Simmons v. Heath Laundry Co[8], in which the meaning of these words in the Workmen’s Compensation Act, 1906, was discussed, Fletcher Moulton L.J. pointed out that a contract of service was not the same thing as a contract for service, and that the existence of direct control by the employer, the degree of independence on the part of the person who renders services, the place where the service is rendered, are all matters to be considered in determining whether there is a contract of service.  As Buckley L.J. indicated in the same case, a contract of service involves the existence of a servant, and imports that there exists in the person serving an obligation to obey the orders of the person served.  A servant is a person who is subject to the commands of his master as to the manner in which he shall do his work.”[9]

  1. [19]
    The term “contractor” is defined in the WCR Act in these terms:

contractor means a person who has contracted with someone else for the performance of work or provision of a service.”[10]

  1. [20]
    By s 11(2) of the WRC Act, the pool of persons who are “workers” is extended to include the persons described in Part 1 of Schedule 2.  By s 11(3) the pool is restricted by eliminating the persons described in Part 2.  Part 1 of Schedule 2 provides:

Part 1  Persons who are workers

  1. 1
    A person who works a farm as a sharefarmer is a worker if—
  1. (a)
    the sharefarmer does not provide and use in the sharefarming operations farm machinery driven or drawn by mechanical power; and
  2. (b)
    the sharefarmer is entitled to not more than 1/3 of the proceeds of the sharefarming operations under the sharefarming agreement with the owner of the farm.
  1. 2
    A salesperson, canvasser, collector or other person (salesperson) paid entirely or partly by commission is a worker, if the commission is not received for or in connection with work incident to a trade or business regularly carried on by the salesperson, individually or by way of a partnership.
  2. 3
    A contractor, other than a contractor mentioned in part 2, section 4 of this schedule, is a worker if—
  1. (a)
    the contractor makes a contract with someone else for the performance of work that is not incident to a trade or business regularly carried on by the contractor, individually or by way of a partnership; and
  2. (b)
    the contractor—
  1. (i)
    does not sublet the contract; or
  2. (ii)
    does not employ a worker; or
  3. (iii)
    if the contractor employs a worker, performs part of the work personally.
  1. 4
    A person who is party to a contract of service with another person who lends or lets on hire the person’s services to someone else is a worker.
  2. 5
    A person who is party to a contract of service with a labour hire agency or a group training organisation that arranges for the person to do work for someone else under an arrangement made between the agency or organisation and the other person is a worker.
  3. 6
    A person who is party to a contract of service with a holding company whose services are let on hire by the holding company to another person is a worker.
  4. 7
    A person (an intern), other than a person mentioned in chapter 1, part 4, division 3, subdivision 1, 2, 3 or 4, is a worker if the person—
  1. (a)
    is performing work for a business or undertaking without payment of wages to gain practical experience in the type of work performed by the business or undertaking, or to seek to obtain a qualification; and
  2. (b)
    would be a worker if the work performed by the person were for the payment of wages.” (emphasis added)
  1. [21]
    Part 2 of Schedule 2 provides:

Part 2  Persons who are not workers

  1. 1
    A person is not a worker if the person performs work under a contract of service with—
  1. (a)
    a corporation of which the person is a director; or
  2. (b)
    a trust of which the person is a trustee; or
  3. (c)
    a partnership of which the person is a member; or
  4. (d)
    the Commonwealth or a Commonwealth authority.
  1. 2
    A person who performs work under a contract of service as a professional sportsperson is not a worker while the person is—
  1. (a)
    participating in a sporting or athletic activity as a contestant; or
  2. (b)
    training or preparing for participation in a sporting or athletic activity as a contestant; or
  3. (c)
    performing promotional activities offered to the person because of the person’s standing as a sportsperson; or
  4. (d)
    engaging on any daily or other periodic journey in connection with the participation, training, preparation or performance.
  1. 3
    A member of the crew of a fishing ship is not a worker if—
  1. (a)
    the member’s entitlement to remuneration is contingent upon the working of the ship producing gross earnings or profits; and
  2. (b)
    the remuneration is wholly or mainly a share of the gross earnings or profits.
  1. 4
    A person who, in performing work under a contract, other than a contract of service, supplies and uses a motor vehicle for driving tuition is not a worker.
  2. 5
    A person participating in an approved program or work for unemployment payment under the Social Security Act 1991 (Cwlth), section 601 or 606 is not a worker.
  3. 6
    A person is not a worker if—
  1. (a)
    the person works for another person under a contract; and
  2. (b)
    a personal services business determination is in effect for the person performing the work under the Income Tax Assessment Act 1997 (Cwlth), section 87-60.”

The QIRC’s decision

  1. [22]
    The QIRC identified the starting point as s 11(1) of the WCR Act.  If Mr Baigorri was a “worker” as defined by s 11(1), then no further investigation was necessary.
  2. [23]
    Mr Baigorri does not qualify as “worker” by force of s 11(1) as, while he worked under a contract,[11] he was not a PAYG employee.  The QIRC so held.  Mr Baigorri does not contest otherwise on appeal.
  3. [24]
    The QIRC then identified three elements which must be fulfilled before a person qualifies as a “worker” within the extended definition in Schedule 2 Part 1 s 3, namely;
    1. the person must be a contractor other than a contractor mentioned in Part 2 s 4 of the Schedule (the first element);
    2. the contractor makes a contract with someone else for the performance of work (the second element); and
    3. the work performed by the contractor is not incident to a trade or business regularly carried on by the contractor, individually or by way of a partnership (the third element).
  4. [25]
    They are undoubtedly the three elements of the relevant extension of the definition of “worker” as defined by s 3 of Part 1 of Schedule 2 of the WCR Act.
  5. [26]
    The QIRC found that neither the first nor third elements were fulfilled.  Consequently, Mr Baigorri was held not to be a “worker”.
  6. [27]
    As to the first element, the QIRC found that Mr Baigorri was relevantly a “contractor”.  The QIRC reasoned that, on a proper construction of s 3 of Part 1 of schedule 2, a person must have the status of a contractor before or at least at the time he makes “a contract… for the performance of work”.[12]  The QIRC then found that Mr Baigorri was not a contractor before or at the time of him making the contract with Allied.[13]
  7. [28]
    After analysing the evidence of Mr Baigorri’s activities after leaving Technofibre, but before contracting with Allied, the QIRC concluded:
  1. “[100]
    Having regard to the evidence referred to above, I accept the Regulator's submissions that at the time of his entry into the contract with Allied, Mr Baigorri was an unemployed worker and was not a contractor who was carrying on any form of trade or business.” (emphasis added)
  1. [29]
    As to the third element, the QIRC found;
    1. Mr Baigorri was operating a courier business at the time of his work accident;[14]
    2. the sorting through and loading of parcels was an incident of that business;[15]and
    3. therefore, the performance of the relevant work by Mr Baigorri for Allied was incident to the courier business that he was carrying on.[16]
  2. [30]
    The critical findings of the QIRC are:
  1. “[108]
    This evidence[17] persuades me that Mr Baigorri was carrying out a business when doing courier work for Allied in that he conducted the activity to make a profit in respect of which he owned tangible assets, met regulatory requirements and used business transactional systems. Mr Baigorri does not dispute that his contract with Allied was a contract for services.
  2. [109]
    The purpose or policy objective of sch 2, pt 1, s 3 of the Act is not to extend the protection of the Act to a contractor who starts and then conducts a business and, in doing so, bears the risk of lost income and medical expenses from personal injury arising out of or in the course of undertaking that business.
  3. [110]
    Mr Baigorri, by entering into the contract, expressly agreed that he personally accepted the risk of lost income and medical expenses from any injury he suffered in the course of performing the contract courier work for Allied. Clause 5.2 (b) of the contract provided that Mr Baigorri would, either by himself or where agreed in co-operation with Allied, obtain and maintain a '…Workers' Compensation Insurance Policy to cover the Contract Carrier, and any person who may from time to time be employed by the Contract Carrier.'  Mr Baigorri's evidence was that he took out insurance which covered public liability and injury or sickness, or as he put it: '… Income protection, basically'.

  1. [115]
    If the business of a courier is to load parcels into a vehicle for delivery, then the sorting of parcels, at the point of collection, as a preliminary step to locating and loading parcels to be delivered into the vehicle, is incident to the business of a courier. The sorting of parcels at the point of collection so as to be able to load deliverable parcels is obviously naturally related to or connected with the business of a courier. To suggest that because a more involved sorting of parcels was required, so as to locate deliverable parcels, is not incident to courier work, strains the ordinary meaning of the phrase '… incident to' and is contrary to common sense.” (footnotes omitted)

Consideration

  1. [31]
    Over the last quarter of a century or so, the High Court has, in a number of cases, considered the appropriate approach of Australian courts to statutory construction.[18]
  2. [32]
    In R v A2; R v Magennis; R v Vaziri[19] the High Court authoritatively summarised and stated these principles as follows:
  1. “32The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled.  It commences with a consideration of the words of the provision itself, but it does not end there.  A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable, has long been eschewed by this Court.  It is now accepted that even words having an apparently clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete.  This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision.
  2. 33Consideration of the context for the provision is undertaken at the first stage of the process of construction.  Context is to be understood in its widest sense.  It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole.  It extends to the mischief which it may be seen that the statute is intended to remedy.  “Mischief” is an old expression. It may be understood to refer to a state of affairs which to date the law has not addressed.  It is in that sense a defect in the law which is now sought to be remedied.  The mischief may point most clearly to what it is that the statute seeks to achieve.
  3. 34This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction.  These considerations were emphasised in the decisions of this Court upon which the Court of Criminal Appeal placed some weight.
  4. 35The joint judgment in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue rejected an approach which paid no regard to the words of the provision and sought to apply the general purpose of the statute, to raise revenue, to derive a very different meaning from that which could be drawn from the terms of the provision. The general purpose said nothing meaningful about the provision, the text of which clearly enough conveyed its intended operation. Similarly, in Saeed v Minister for Immigration and Citizenship the court below was held to have failed to consider the actual terms of the section.  A general purpose of the statute, to address shortcomings identified in an earlier decision of this Court, was not as useful as the intention revealed by the terms of the statute itself.  In Baini v The Queen, it was necessary to reiterate that the question of whether there had been a ‘substantial miscarriage of justice’ within the meaning of the relevant provision required consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials, other cases and different legislation.
  5. 36These cases serve to remind that the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words.  As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision.
  6. 37None of these cases suggest a return to a literal approach to construction. They do not suggest that the text should not be read in context and by reference to the mischief to which the provision is directed. They do not deny the possibility, adverted to in CIC Insurance Ltd v Bankstown Football Club Ltd, that in a particular case, ‘if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance’.  When a literal meaning of words in a statute does not conform to the evident purpose or policy of the particular provision, it is entirely appropriate for the courts to depart from the literal meaning.  A construction which promotes the purpose of a statute is to be preferred.”[20] (footnotes omitted)
  1. [33]
    In summary, the task of construing a statutory provision involves discerning the meaning of the actual text against the statute as a whole and in the context of purpose, statutory history and any relevant extrinsic materials.
  2. [34]
    The traditional hallmark of a “worker” was a person who worked under a contract of service as opposed to a contract for services.[21]  Section 3 of the Workers Compensation Act 1916-1988 defined a “worker” as someone who was entitled to the benefits of this scheme in that way, namely a person subject to a contract of service.
  3. [35]
    In 1918, the 1916 Act was amended and the definition of “worker” was extended by the introduction of s (3)(2) to s 3.  It then appeared:
  1. “(2.)
    Where a contract to perform any work exceeding five pounds in value (not being work incidental to a trade or business regularly carried on by the contractor in his own name or under a firm name) is made with a contractor who –
  1. (a)
    Neither sublets the contract nor employs wages-men; or
  2. (b)
    Though employing wages-men, actually performs any part of the work himself, such contractor and also such wages-men so employed shall for the purposes of this Act be deemed to be workers employed by the person who made such contract with such contractor:

Provided that such contractor and wages-men shall be deemed to be covered by the subsisting policy held by the person who made such contract:

Provided further that this subsection shall not apply to salesmen, canvassers, collectors, or any person in receipt of commission.”

  1. [36]
    Over the following century, the definition was amended.  It is unnecessary to track the amendments.  I agree with the comments made in the QIRC as follows:
  1. “[52]
    This history discloses that the persons primarily covered by workers’ compensation legislation in Queensland have been employees.  However, the Legislature has extended the benefit of the various Acts to certain persons who are not employees.  Relevantly, this was done by deeming contractors, or person who were not employees, to be workers when they entered into contracts to perform work which was not connected with a trade or business regularly carried on by them and where they performed part of the work personally.
  2. [53]
    Put shortly, for most of the time since 1918, the Legislature has decided to treat a contractor as a worker, for the purposes of workers’ compensation legislation, when the contractor was injured in the course of performing work that they contracted with someone else to perform, being work they did not do in their regularly carried on trade or business.”[22]
  1. [37]
    No doubt the 1918 amendment to the 1916 Act, and the various enactments thereafter were in response to changing ways in which labour was being provided.  The aim of all the provisions over the years was to identify relationships beyond the traditional master-servant relationship to which the rights under the Workers Compensation legislation would attach.  The amendments show an abandonment of the previously determinative distinction between a contract of service (by an employee) and a contract for services (by a contractor).[23]
  2. [38]
    Various cases explain the principles pertaining to the distinction between an independent contractor and an employee.  ACE Insurance Ltd v Trifunovski & Ors[24] is an example, and so is Toowoomba Demolition and Earthmoving Pty Ltd ATF Castle Family Trust v Workers’ Compensation Regulator[25].  This distinction now arises for consideration in various contexts, many of which are very different to the present.  The significance of any distinction varies depending upon the context in which it arises.
  3. [39]
    An example of this is Hollis v Vabu Pty Ltd.[26]  That was a case involving a courier, who was injured in an accident with another courier employed by a different company.  The issue was whether the company who owned the business for whom the second courier was working was an employee or an independent contractor.  That was relevant to the consideration of whether, under common law principles, the company for whom the second employee worked was vicariously liable for his negligence which caused the accident.  An unnecessary distraction in Hollis v Vabu was the decision of Vabu Pty Ltd v Federal Commissioner of Taxation[27].  There, the couriers employed by Vabu were found, for the purposes of the Superannuation Guarantee (Administration) Act 1992 (Cth), to be independent contractors.  For the purposes of common law vicarious liability, the High Court found the courier drivers to be employees.
  4. [40]
    It is well established that the term of a worker’s employment is derived from the contract of employment, industrial instruments, statutes and ministerial directions.[28]  Here, the question is whether Mr Baigorri falls within a particular statutory definition to bring him within a statutory scheme.  Those issues will be determined upon a proper construction of the relevant statutory provisions, not a consideration of common law notions of the distinction between an employee and an independent contractor.
  5. [41]
    I disagree with the QIRC’s determination that, in order for element 1 to be fulfilled, Mr Baigorri had to have the status of “contractor” before entering into the contract with Allied to perform the courier work.
  6. [42]
    Section 11 and Schedule 2 of the WCR Act, like their predecessors, are concerned with the status of a potential employee and a potential employer while the work is being performed.  It is while the work is being performed that a compensable injury could occur.
  7. [43]
    Section 11 and Schedule 2 draw a distinction between a “worker” and “contractor”.  By s 11, a person who contracts with the employee is a “worker”, provided PAYG is payable.  That person is a “worker” upon being employed, regardless of whether the person was previously employed and was previously a “worker”.  The question is whether the person has the status of “worker” once employed, i.e. when they perform “works under a contract”.[29]
  8. [44]
    Schedule 2 Part 1 s 3 constitutes certain “contractors” as “workers”.  Schedule 2 Part 1 s 2 constitutes persons who are paid by commission as “workers”.
  9. [45]
    The salesperson, canvasser or collector referred to in s 2 of Part 1 of Schedule 2 is a “worker” as regards the person or entity who is paying the commission.  It is not necessary for the person to hold the status of salesman, canvasser or collector before entering into the contract with the prospective employer.  The clear intention is that, if a person (whatever their status or experience) enters into a contract then the person will be a “worker” in relation to the relationship being formed, provided that they are paid entirely or partly by commission and the other conditions in Part 1 s 2 of Schedule 2 are fulfilled.
  10. [46]
    Consistently with s 11 and s 2 of Part 1 of Schedule 2 of the WCR Act, on a proper construction of s 3, what is under consideration is the status of the contractor, vis a vis the person with whom he has contracted for the performance of work.
  11. [47]
    If a person contracts with another for the performance of work, they are a “contractor” by definition and they are also a “worker” if, in relation to that contract, the work which is to be undertaken “is not incident to a trade or business regularly carried on by the contractor, individually or by way of a partnership”.[30]
  12. [48]
    This construction is consistent with the cases that I analyse later.[31]
  13. [49]
    In summary, Mr Baigorri contracted to do courier work for Allied.  As to his relationship with Allied, he was thereby “a contractor” regardless of whether he previously had been a “contractor” with any other entity.
  14. [50]
    The third element raises the concept of a “contractor” conducting a “business”.  As previously observed, the QIRC held that Mr Baigorri established a business.[32]  On the facts as found and not disputed, that business was one of providing courier services for Allied and only Allied.  The QIRC specifically held that Mr Baigorri was not a “contractor” before he entered into the contract with Allied, in that he had not by then “contracted with someone else for the performance or work or provision of a service.[33]  While I do not agree with the legal ramifications of that finding, for the reasons previously explained,[34] it is tantamount to a factual finding that Mr Baigorri was not conducting a business prior to entering into the contract with Allied.
  15. [51]
    There are two possible constructions of s 3 of Part 1 of Schedule that are relevant here.
  16. [52]
    The first is that which was preferred by the QIRC.  That is that the “business” can be exclusively confined to the “performance of work” for “someone else” for whom the person is arguably a “worker”.[35]
  17. [53]
    If that construction is the correct one, then the work was performed in the conduct of Mr Baigorri’s courier business (exclusively for Allied) and the sorting work was work done incidentally to that business.  He is therefore not a “worker”.
  18. [54]
    The second possible construction is that the “contract … for the performance of work” must be considered separately to any business which is “regularly carried on by the contractor”.  Therefore, if there is a business or undertaking which is wider than just the contract under construction, s 3 will not be engaged.
  19. [55]
    It is the second possible construction of s 3 which I prefer.
  20. [56]
    No authority could be found where a court or tribunal had considered the relevant aspects of the WCR Act.  There are decisions which have considered legislation in other states.  The English language is such that a small variation in form can make a significant difference in meaning. After all, Sir Roger Casement was allegedly hanged by a comma.  There are dangers in relying upon decisions construing similar but not identical provisions.[36]
  21. [57]
    Here, the general structure of the various statutes and the underlying purpose of the provisions are such that the decisions concerning their construction are of some assistance.
  22. [58]
    In Humberstone v Northern Timber Mills[37] the High Court considered the Workers Compensation Act 1928-1946 (Vic).  The appellant owned, ran and paid all the expenses of a truck.  For many years before his death, the appellant only did courier work for the respondent.  He was under the direction of other employees of the respondent.  They told him what to cart and where to cart it.  He was fatally injured in the process of repairing a punctured tyre on the truck.
  23. [59]
    The legislation benefited the appellant’s widow provided Mr Humberstone was a “worker”.  That term was defined as a person who worked under a contract of service.  The appellant was an independent contractor.  However, the legislation provided for an extension of benefits where contractors fell within s 3(6) of the Act.  It provided:

“… “Notwithstanding anything in this Act or any law where any person (in this sub-section referred to as ‘the principal’) in the course of and for the purposes of his trade or business enters into a contract with any other person (in this sub-section referred to as ‘the contractor’) — (a) under or by which the contractor agrees to perform any work not being work incidental to a trade or business regularly carried on by the con-tractor in his own name or under a firm or business name; and (b) in the performance of which the contractor does not either sublet the contract or employ workers or although employing workers actually performs some part of the work himself — then for the purposes of this Act the contractor shall be deemed to be working under a contract of service with an employer and the principal shall be deemed to be that employer.”

  1. [60]
    Latham CJ and Dixon J (as his Honour then was) had different views as to the operation of s 3(6).  Of that subsection, Lathan CJ observed:

“The idea of this provision is evidently to extend the benefits of the Act to persons who agree to do work which is not work belonging to a trade or business carried on by them, even though they may regularly carry on a trade or business.  In the first place, there must be an agreement by B (a contractor) to perform some work for A (a principal).  Next, B may or may not regularly carry on a trade or business in his own name or under a firm or business name; that is, on his own account.  If he does regularly carry on any such business, then the work agreed to be performed must be work which is not incidental to that business.  If B, however, undertook for A a job which was quite different from, so as not to be incidental to, any of the work which belonged to a trade or business regularly carried on by him, then, in relation to any such work agreed to be done by him he would be deemed to be working under a contract of service with A.  But if B did not carry on any trade or business of any kind on his own account, then no work which he agreed with A that he should do could be work incidental to a trade or business being carried on by him.  Therefore in such a case if B agreed to do any work at all for A he would come within the section.  The position would be the same if he carried on some trade or business but did not carry it on regularly and the work which he agreed to do fell outside work incidental to that trade or business.”[38]

  1. [61]
    However, in Dixon J’s view:

“In my opinion the work which the deceased was performing for the respondents was not work incidental to a trade or business regularly carried on by him in his own name within the meaning of the sub-section and of course no such trade or business was carried on by him under a firm or business name.  I think that the purpose of the exception or exclusion expressed by the words in question was to confine the benefit of the conclusive presumption which it establishes to persons who do not conduct an independent trade or business, who are not holding themselves out to the public under their own or a firm or business name as carrying on such a trade or business and who do not in the course of that trade or business, as an incident of its exercise, undertake the work by entering into the contract.  The provision will thus cover men who work for the principal but have no independent business or trade and men who though carrying on an independent trade or business undertake a contract outside the scope or course of that trade or business.

But a consideration of the policy of the provision as well as of its text appears to me to show that the distinction it seeks to draw is between on the one hand an independent contractor whose relation with the principal is special or particular either because it is outside the course of the general business of the contractor or the general practice of his trade or because he has no such general business or is not a general practitioner of his trade, and on the other hand an independent contractor who performs work successively or perhaps concurrently for his customers or others in the course of a definite trade or business carried on systematically or who holds himself out as ready to do so.  The language of the sub-section is derived from the provision that stands as s. 14 (1) (a) of the Victorian Workers’ Compensation Act 1928, where the words are “where any person ... in the course of or for the purposes of his trade or business contracts with any other person.”[39]

  1. [62]
    The comments of both Latham CJ and Dixon J were dicta.  This is because s 3(6) was enacted after the appellant began his work for the respondent.  For that reason, the third member of the Court, Rich J, made no comments on the construction of s 3(6) other than to hold that it had no retrospective operation.  Both Latham CJ and Dixon J also held that the provision had no retrospective effect.
  2. [63]
    The views expressed by Dixon J in Humberstone had been approved twice by the High Court in Zuijs v Wirth Brothers Pty Ltd[40] and Higgins v Jackson.[41]  His Honour’s approach was also followed in Cam v Cousins Interstate Transport Pty Ltd[42] and Kovacic v Henley Arch Pty Ltd[43]
  3. [64]
    In construing s 3 of Part 1 of Schedule 2, the starting point is the making of a contract with another party “for the performance of work”.  That contract is entered into at a particular point in time and is the act which potentially constitutes a contractor as a “worker”.  At that point in time, the person does not become a “worker” if the work that he has contracted to perform is “incidental to a trade or business regularly carried on by the contractor”.  In other words, if there is an existing business for “the performance of work” and the person enters into a contract with someone for “the performance of work” incidental to the business, then the person does not become a “worker”.
  4. [65]
    In the present case, there was no existing business.  Any “business” of Mr Baigorri was constituted by performance of the “contract with [Allied] for the performance of work”.  He had no business before he made a contract with Allied for the performance of courier work.[44]
  5. [66]
    The fact that Mr Baigorri is described in his contract with Allied as an independent contractor is of no relevance.  Schedule 2 of the WCR Act does not draw a distinction between an “independent contractor” and a “worker”.  It defines a “worker” and then provides when a “contractor” becomes a “worker”.  The critical issue is not whether Mr Baigorri was a contractor but whether as a contractor, he was also a “worker”.  If the preconditions are fulfilled, Mr Baigorri is a “worker” no matter what the contract provides.
  6. [67]
    It is also beside the point that Mr Baigorri agreed by his contract with Allied to insure himself.  The issue is whether a statutory benefit enures to him.  If he satisfies the preconditions, it does, whether or not there were other covenants in the contract dealing with workers’ compensation.
  7. [68]
    The fact that the “contract … for the performance of work” may lead to the establishment of a “business” does not disqualify a contractor from qualifying as a worker.  In fact that is clearly contemplated by the legislation.  The repeated performance of work for reward under contracts for services, especially where the contractor employs a worker, will often be a “business”.  Yet, s 3(b)(iii) of Part 1 of Schedule 2 contemplates that, even in those circumstances, and where the contractor himself has employees, the contractor may be a “worker” provided that he performs part of the work himself.
  8. [69]
    That construction is consistent with the general policy of the provisions and with what decided cases there are.  The general policy of the provisions is to look past the particular legal structure of the arrangements, which might constitute a “contract for services” and include the person as a “worker” where if, in substance, the contract is one of service.  That is so the statute provides where the work is not incident to a business “regularly carried on by the contractor”.

Conclusions

  1. [70]
    Mr Baigorri does not qualify as a “worker” by force of s 11(1) of the WCR Act.
  2. [71]
    Mr Baigorri qualifies as a “worker” by force of s 3 of Part 1 of Schedule 2 of the WCR Act because:
  1. (a)
    He made a contract with Allied for the performance of work.[45]
  2. (b)
    The contract was not a contract of service but a contract for services.
  3. (c)
    He was thereby a “contractor”.
  4. (d)
    He did not conduct a business beyond the “contract for the performance of work” with Allied.
  5. (e)
    The work to be performed pursuant to the contract with Allied was not incident to a business regularly carried on by him.
  6. (f)
    Therefore, he was a “worker” within the meaning of the WCR Act.
  1. [72]
    It follows that the appeal should be allowed.
  2. [73]
    The costs of the proceedings in the QIRC were awarded against Mr Baigorri and separate reasons were given.[46]  There is no separate appeal against that order[47] but the costs order flowed as a consequence of Mr Baigorri’s defeat in the appeal.
  3. [74]
    The costs order made in the QIRC ought to be set aside and the parties given an opportunity to make submissions as to costs of the proceedings before the QIRC and this Court on appeal.
  4. [75]
    The orders are:
  1. 1.The appeal is allowed.
  2. 2.The orders made in the Queensland Industrial Relations Commission on each of 22 June 2023 and 11 July 2023 are set aside.
  3. 3.The appellant’s claim for compensation is remitted to WorkCover to be considered according to law.
  4. 4.By 4pm on 6 March 2024 the appellant shall serve written submissions on costs of the proceeding before the Queensland Industrial Relations Commission and this Court.
  5. 5.By 4pm on 13 March 2024 the respondent shall file written submissions on costs in reply.
  6. 6.Each party may file and serve an application in existing proceedings to make oral submissions on costs by 4pm on 20 March 2024.
  7. 7.In the absence of any application to make oral submissions being filed by 4pm on 20 March 2024 the question of costs will be dealt with on the papers without oral submissions.

Footnotes

[1] Baigorri v Workers’ Compensation Regulator [2023] QIRC 190.

[2] Turay v Workers’ Compensation Regulator (2023) 326 IR 28.

[3] By implication.

[4] Baigorri v Workers’ Compensation Regulator [2023] QIRC 190 at [107].

[5] Baigorri v Workers’ Compensation Regulator [2023] QIRC 190 at [124].

[6] Section 7 and Schedule 6.

[7] [1916] 2 Ch 601.

[8] [1910] 1 KB 543.

[9] At 610-611.

[10] Section 7 and Schedule 6.

[11] Section 11(1)(a).

[12] Baigorri v Workers’ Compensation Regulation [2023] QIRC 190 at [71] and [96].

[13] At [100] – [103].

[14] At [104] – [108].

[15] At [114] – [115].

[16] At [114] – [115].

[17] The evidence referred to at paragraph [107] which appears at paragraph [11] of these reasons.

[18] K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Alcan (NT) Aluminia Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; SAS Trustee Corporation v Miles (2018) 265 CLR 137; and Unions NSW v New South Wales (2019) 264 CLR 595.

[19] (2019) 269 CLR 507.

[20] Followed in Minister for Immigration Citizenship Migrant Services and Multicultural Affairs v Thornton (2023) 97 ALJR 488 at [54].

[21] University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601, paragraph [18] of these reasons.

[22] Baigorri v Workers Compensation Regulator [2023] QIRC 190 at [52]-[53].

[23] L&B Linings Pty Ltd v WorkCover Authority of New South Wales [2011] NSWSC 474 (n76) at [36].

[24] (2013) 209 FCR 146

[25] [2020] QIRC 30.

[26] (2001) 207 CLR 21.

[27] (1996) 33 ATR 537.

[28] Byrne v Australian Airlines (1995) 185 CLR 410 at 419-21; and Ex parte McLean (1930) 43 CLR 472 at 479.

[29] Section 11(1)(a).

[30] Schedule 2, Part 1, s 3(a).

[31] Paragraph [58]-[63] of these reasons.

[32] See paragraph [30] of these reasons.

[33] Baigorri v Workers’ Compensation Regulator [2023] QIRC 190 at [96]-[103].

[34] Paragraphs [41]-[49] of these reasons.

[35] The critical findings of the Queensland Industrial Relations Commission are at paragraphs [28]-[30] of these reasons.

[36] Marshall v Director-General, Department of Transport (2001) 205 CLR 603 at [62] per Hayne J.

[37] (1949) 79 CLR 389 at 397.

[38] Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 397.

[39] Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 401 and 402.

[40] (1955) 93 CLR 561 at 574.

[41] (1976) 135 CLR 174 per Barwick CJ at 176 with Stephen J, Mason J (as his Honour then was) and Murphy J agreeing; Jacobs J in dissent on other issues also followed Dixon J in Humberstone.

[42] [1964] NSWR 1288.

[43] (2009) 22 VR 21 at [16]-[29].

[44] Section 3(a) of Part 1 of Schedule 2.

[45] The written contract with Allied.

[46] Baigorri v Workers’ Compensation Regulator (No 2) [2023] QIRC 201.

[47] Made on 11 July 2023.

Close

Editorial Notes

  • Published Case Name:

    Baigorri v Workers' Compensation Regulator

  • Shortened Case Name:

    Baigorri v Workers' Compensation Regulator

  • MNC:

    [2024] ICQ 2

  • Court:

    ICQ

  • Judge(s):

    Davis J, President

  • Date:

    28 Feb 2024

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
ACE Insurance Ltd v Trifunovski (2013) 209 FCR 146
2 citations
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27
2 citations
Baigorri v Workers' Compensation Regulator [2023] QIRC 190
7 citations
Baigorri v Workers' Compensation Regulator (No. 2) [2023] QIRC 201
2 citations
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
2 citations
Cam v Cousins Interstate Transport Pty Ltd [1964] NSWR 1288
2 citations
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
2 citations
Ex parte McLean (1930) 43 CLR 472
2 citations
Higgins v Jackson (1976) 135 CLR 174
2 citations
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
2 citations
Humberstone v Northern Timber Mills (1949) 79 CLR 389
4 citations
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309
2 citations
Kovacic v Henley Arch Pty Ltd [2009] VSCA 56
1 citation
Kovacic v Henley Arch Pty Ltd (2009) 22 VR 21
2 citations
L&B Linings Pty Ltd v WorkCover Authority of New South Wales [2011] NSWSC 474
2 citations
London Press Ltd. v University Tutorial Press Ltd. (1916) 2 Ch 601
3 citations
Marshall v Director General Department of Transport (2001) 205 CLR 603
2 citations
Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Thornton (2023) 97 ALJR 488
2 citations
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
2 citations
R v A2 (2019) 269 CLR 507
2 citations
SAS Trustee Corporation v Miles (2018) 265 CLR 137
2 citations
Simmons v Heath Laundry Co. (1910) 1 KB 543
1 citation
SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362
2 citations
Toowoomba Demolition and Earthmoving Pty Ltd v Workers' Compensation Regulator [2020] QIRC 30
2 citations
Turay v Workers’ Compensation Regulator (2023) 326 IR 28
2 citations
Unions NSW v New South Wales (2019) 93 ALJR 166
1 citation
Unions NSW v New South Wales (2019) 264 CLR 595
1 citation
Vabu Pty Ltd v Federal Commissioner of Taxation (1996) 33 ATR 537
2 citations
Zuijs v Wirth Bros Pty Ltd (1955) 93 CLR 561
2 citations

Cases Citing

Case NameFull CitationFrequency
Baigorri v Workers' Compensation Regulator (No 2) [2024] ICQ 72 citations
Foord v Workers' Compensation Regulator [2025] QIRC 275 citations
1

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