Pest control franchisee wins workers compensation

A pest control franchisee was found to be a worker and therefore able to make a workers compensation claim, in an appeal decision of the Workers Compensation Commission of New South Wales.


The pest control franchisee, Mr Chaaya, entered a technician licence agreement with Amalgamated Pest Control Pty Ltd in April 2010 requiring him to commit to pay $1,000 establishment and $5,000 training.

Further, he used his own ABN, provided his own utility vehicle painted and branded with the appellant’s logo, used the appellant’s pest control equipment but provided his own chemicals, attended jobs at times notified to him daily by the appellant, and was paid after the appellant collected on its invoice, and he would receive a little under half of the remittance.

Arbitrator’s decision

In assessing Mr Chaaya’s claim for workers compensation at first instance, the arbitrator determined that Mr Chaaya was in fact an employee and not an independent contractor quoting Bromberg J in On Call Interpreters and Translators Agency Pty Ltd v Commission of Taxation (No 3) [2011] FCA 366; 279 ALR 341 at [204]: which used the multi-factorial test; at [207, 208].

Mr Wynyard said: “Adopting the dicta from Bromberg J in On Call Interpreters, the authorities now provide that the ultimate question, or the focal point, is rooted fundamentally in the question as to whether a person is providing services to another business as part of his own business or whether he was working in that other business.”

“It is the ‘entrepreneur test’ as Bromberg J said that poses and answer the question whether a person is an employee or an independent contractor.”

Deputy President’s Decision

On appeal, the Deputy President agreed with the arbitrator’s decision that the pest controller was in fact an employee.

Control, albeit non-determinative, was established by proof that the customers were the appellant’s, as well as the signage on the vehicle notwithstanding the worker’s ownership, control over the use and maintenance of the equipment, the power to terminate and right to dismiss, ABN and tax arrangements.

Other factors addressed were the hours of work and obligation to work, holidays and sick leave, delegation of work, power of delegation and mode of remuneration.

“In the present case invoices were issue on the appellant’s letterhead. Though Mr Chaaya’s name appeared on the invoices, as licensee, all contact details on the invoices were the appellant’s. Those details included the phone number, facsimile number, web and email address. The appellant kept control of all revenue and was responsible for collecting any outstanding debts. None of these matters is compatible with Mr Chaaya being an independent contractor running his own business.”

Further factors were insurance, the agreement provisions for the asset and sale of licence and goodwill, control of work practices and price.

“While Mr Chaaya did not work for a wage and could earn more by making himself available for more work, the essence of a business is the conduct of a commercial enterprise as a going concern (On Call Interpreters at [210], citing Minister for Employment and Work Place Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [83]).

It will usually involve the acquisition and use of tangible and intangible assets in the pursuit of profit (On Call Interpreters) at [210], citing Hope v Bathurst City Council (1890) 144 CLR 1 at 8-9).

Business usually has an intangible asset, its name, brand, reputation or goodwill (On Call Interpreters at [210]).

In his activities with the appellant, the evidence clearly established that Mr Chaaya did not conduct a commercial enterprise as a going concern, had no assets (apart from his car, which carried the appellant’s name and signage) of any great value, and, because of the terms of the agreement, had no ‘brand’, reputation or goodwill,” Roche DP said [168].

That the agreement had expressed “no relationship of employment was intended or implied into the agreement” was immaterial.

“The labels used to describe the parties are of little assistance if they ‘are inconsistent with the real substance or reality of the relationship’ (On Call Interpreters at [246]). ‘A clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual’: R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138 per Dixon, Fullagar and Kitto JJ at 151). Consistent with these authorities, and given the reality of the arrangement in the present case, I find that clause 20 [of the agreement] is of no effect,” the deputy president said [171].

Mr Roche thereafter rationalised that Mr Chaaya would otherwise be found a contracted deemed worker pursuant to 1998 Act Sch 1 cl 2, citing and quoting authorities [177-193].

Award confirmed, remitted to Registrar.

Amalgamated Pest Control Pty Ltd v Chaaya [2015] NSWWCCPD 53. Roche DP. 3.9.15. Read the full decision here.

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