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Clabbs Pacific Ltd v The Labour Officer [2023] FJHC 591; ERCA 03 of 2021 (16 August 2023)

IN THE EMPLOYMENT RELATIONS COURT AT SUVA
CENTRAL JURISDICTION
CIVIL JURISDICTION

ERCA: 03 OF 2021

BETWEEN:
CLABBS PACIFIC LIMITED
APPELLANT

AND:

THE LABOUR OFFICER

RESPONDENT

Date of Hearing: 6 June 2023
For the Appellant: Mr. Sharma and Ms. Ram
For the Respondent: Ms. Narayan
Date of Decision: 16 August 2023
Before: Levaci SLTTW, J

J U D G M E N T
(APPEAL FROM EMPLOYMENT RELATIONS TRIBUNAL)

Cause and Background

1. This Appellant Employer Appeals against the decision of the Tribunal.
   
2. The Respondent initially worked as a welder and fabricator for the Appellant on a contract basis to make rubbish bins in two sizes (costing $350 for big rubbish bins and $250 for small rubbish bins) and paid weekly depending on the number of rubbish bins produced. On or about 2017 he was offered a permanent position to continue to make rubbish bins and weld trucks with a weekly wage of $300 per week working from 8am to 5pm on Mondays to Fridays and 8am to 1pm on Saturdays.
   
3. On 9 November 2017 whilst cutting down the boom on the gantry truck the disc broke into pieces and one of the broken pieces cut off his middle finger on his left hand and caused his left middle finger to be amputated.
   
4. The Respondent thereafter claimed for workmen’s compensation.
   
5. By a Tribunal Decision on 13 August 2020, the Respondent was awarded compensation of $8580.00 payable in 21 days for having been injured in an accident whilst serving in the course of his employment.
   

Grounds of Appeal

6. The Appellant has filed four grounds of appeal and the issues of determination are as follows –
   
   1. ‘’The Learned Magistrate erred in law and fact when he held that the Respondent was engaged on a contract of service when the evidence adduced established that the Respondent was hired as a contractor to provide professional service to construct rubbish bins and was paid based on the number of rubbish bins completed.
      
   2. The Learned Magistrate erred in law and fact when he failed to uphold the interpretation provided under section 2 (1) of the Workmen’s Compensation Act [Cap 94] that the Act is only applicable to persons engaged on contract of service whereas the case of the Respondent he was engaged as an independent contractor that is contract of service.
      
   100. The Learned Magistrate erred in law and fact when he failed to uphold that the purported injury arose in the course of employment when there was no evidence adduced to support there was a valid employment contract executed between the parties at the material time. On that injury arouse during the course of employment.
        
   4. The Learned Magistrate erred in law and fact in awarding the compensation in the sum of $8, 580.00 based on an erroneous claim for which the appellant was not liable.’

Law on Appeal

7. Section 220 (1) of the Employment Relations Act 2007 stipulates that –
   

‘220 (1) The Employment Relations Court has jurisdiction –

(a) To hear and determine appeals conferred upon it under this Promulgation and any other written law.’

8. Section 225 of the Employment Relations Act 2007 stipulates that an Appeal to the Employment Relations Court is as of right from a decision of the first instance of the ERT.
   
9. Section 22 (1) of the Workmen’s Compensation Act empowers the High Court to hear an Appeal under the Workmen’s Compensation Act. It states as follows –
   

Appeals

22.-(1) Subject to the provisions of this section, or of section 12, or of subsection (2) of section 33, an appeal shall lie to the Supreme Court from any order of the court.

Provided that the Supreme Court may, if it thinks fit, extend the time for appealing under the provisions of this section notwithstanding that the time for appealing has elapsed.

10. This is an Appeal against the decision of the ERT to grant an application for Workmen’s Compensation and award Ilaisa Momo, found the Tribunal to be an employee, who suffered injury whilst employed with the Appellant.
    
11. An Appellate court will be slow to interfere with the factual findings of an original court unless they are plainly wrong or drew wrong inferences from the facts and the Appellate court need not exercise jurisdiction to interfere with the Tribunal’s decision only because it exercised its discretion in another way (see Tuckers Employees and Staff Union –v- Goodman Fielder International (Fiji) Limited ERCA No. 28 of 2018). The Appellate Court will review a decision where from the face of the record the Court finds that the Tribunal has blatantly erred in facts or law and has acted in ultra vires or has failed to consider a pertinent issue raised before the Tribunal.
    
12. The Appellate Court will not overturn a decision of the Tribunal unless the above factors have been met. Consideration is made to the observations of Lord Reid in Benmax-v- Austin Motors Co Ltd [1955] ALL ER 376 at 329 :
    

‘I think the whole passage, refers to cases where the credibility or reliability of one or more witnesses has been in dispute and where a decision on these matters has led the trial judge to come to his decision on the case as a whole. That be right, I see no reason to doubt anything said by Lord Thankerton. But in cases where there is no question the credibility or reliability of any witness, and in cases where the point in dispute is the proper inferences to be drawn from proved facts, an appeal court is generally in as good a position in evaluating the evidences as the trial judge, and ought not to shrink from that task, though it ought of course to give weight to his opinion....’ (underlining my emphasis).

13. As was said by Pathik J in Fiji Sugar Corporation Ltd –v- Labour Officer [1995] FJHC 27; Hba0004,93b (3 February 1998) when he paid heed to the dicta of Lord Shaw in Clark –v- Edinburgh Tramways Corporation [1919] UKHL 303; (1919) S.C (HL) 35 where it was stated –
    

‘ ... in my opinion, the duty of the appellate Court in these circumstances is for each Judge of it to put to himself, as I now do in this case, the question, Am I – who sit here without those advantage, sometimes broad and sometimes subtle, which are the privilege of the Judge who heard and tried the case – in a position, not having those privileges, to come clear conclusion that the Judge who had them was plainly wrong? If I cannot be satisfied in my mind that the Judge with those privileges was plainly wrong then it appears to me to be my duty to defer his judgment.’

14. Thus in the case of Carpenters Fiji Limited –v- The Labour Officer and on behalf of Katarina Esita and Others [1984] 30 FLR 26 J.A Speight VP, Mishra J.A and O’Reagan J.A had this to say –
    

‘As was said by Slesser L.J in White Ebbw Vale etc Co. [1936] All ER. 1221 at 1222 –

‘The question which arises upon this appeal is whether the county court judge was or was not entitled to draw an inference of fact from certain facts which appeared in the evidence. The principles upon which he has to proceed are very clearly stated by Lord Birkenhead in the case of Lancaster –v- Blackwell Collier Co. Ltd at p 406 where he says this:

The principles which have to be applied to facts like these are now well settled, they have been declared in numerous occasions by your Lordships and they may be very easily summarized. If the facts which are proved give rise to conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture, then of course the applicant fails to prove his case, because it is plain that the onus in these matters is upon the application. But where the known facts are not equally consistent, where there is ground for comparing and balancing probabilities In their respective value, and where a reasonable man might hold that the more probable conclusion is that for which the applicant contends, then the arbitrator is justified in drawing in his favour.’

Issues on Appeal

Was the Respondent an Employee at the time of the accident which caused the injury?

15. To determine Grounds 1 and 2, the Court must consider the provisions of Section 5 of the Workmen’s Compensation Act.
    
16. In order to determine whether or not an Employee is awarded compensation for an injury sustained in an accident arising from the course of employment in accordance with section 5 of the Workmen’s Compensation Act, the Court found that the Tribunal had correctly identified the three factors:
    
    • (i) Was there an injury to the workman caused by an accident?
    • (ii) Did that accident occur during employment?
    • (iii) Was that accident in the course of employment?
      

17. In doing so the Court must consider the grounds of Appeal as to whether the Respondent was an employee at the time of the accident. In the Learned Magistrates decision is as follows -

’29. If Mr. Navara has accepted the offer of permanent employment with CPL on 27 November 2017, as argued by Mr. Kumar then it is not possible for Mr. Navara to exhaust his leave entitlement. It thus follows that Mr. Navara could only have exhausted his leave entitlements if he was already a permanent employee of CPL prior to 17 November 2017, this includes 9 November 2017.

30. Furthermore whilst the exact date of Mr. Navara’s employment with CPL is disputed, the evidence and oral testimony of Mr. Navara and Mr. Prasad established that Mr. Navara was working on the boom of the gantry truck on 9 November 2017 under the direction and control of Mr. Kumar. It was also clear as day follows night from the evidence given by Mr. Navara and Mr. Prasad that Mr. Kumar gave instructions to Mr. Navara of all the works that he had to do in a day.

32. In applying the above authorities to the facts of the case, I find that Mr. Navara’s work was controlled by CPL his employer. He was not allowed to leave his workplace without CPL’s consent. To proceed to annual leave he would have to notify CPL. CPL provided him with the tools and materials for work. He was also accommodated within CPL’s compound.’

18. The definition of an ‘employment’ in the ERA is defined as follows –

‘employment’ means the performance by a worker of a contract of service’.

23. The ERA recognizes an ‘employee’ as a worker. A worker is defined under the Employment Relations Act as –

‘worker’ means a person who is employed under a contract of service and includes an apprentice, learner domestic worker, part-time worker or casual worker.

19. An employer is defined under the same ERA as –

‘employer’ means a corporation, company, body of persons or individual by whom a worker is employed under a contract of service and includes –

(a) The Government;
(b) Other Government entities;
(c) A local authority;
(d) A statutory authority
(e) The agent or authorized representative of a local or foreign employer.

20. An ‘employment contract’ is defined under ERA to

‘ means a collective agreement or apprenticeship contract specified under this Promulgation or any other written law or an oral or written contract of service between a worker and an employee.’

21. The Supreme Court of Fiji in Hassan v Transport Workers Union [2006] FJSC 11; CBV0006U.2005S (19 October 2006) held

'[68] Before applying the employee-independent contractor distinction in a statutory context, the question must be asked - what is the proper interpretation of the statute? For the statute may define "employee" or "employer" in a way which elides the distinction. The common law does not determine the meaning of the statute. However, where there is an established common law principle the statute is not generally taken to displace it unless it does so expressly or by necessary implication. There is an overlapping interpretive principle that where terms are used in a statute which have acquired an established judicial interpretation, there will be an inference that the legislature intended that interpretation to apply to those terms. There is nothing in the Recognition Act to suggest that it extends beyond employments existing at common law.''

22. The ERA does not provide any provision that expressly states that common law principles should not be applied to properly interprete legislation.
23. Hence the common law position applicable in Fiji must be considered.
24. In Halsbury's Laws of England in Employment (Vol 39 (2009) 5th Ed, para 1-561; Vol E 409) 5^th edited ed Para 562-1Vol 41 (2009) 5^th Ed, PARAS 1042-1503)/1. Nature of a Contract of Employment/ (1) Employment under contract -

“4. Test whether a person is an employee at common law.

There is no single test for determining whether a person is an employee. The test that used to be considered sufficient, that is to say the 'control' test, can no longer be considered sufficient, especially in the case of the employment of highly skilled individuals, and is now only one of the particular factors which may assist a court or tribunal in deciding the point. More recently, the 'integration' or 'organization' test had been suggested, proposing that the important question was whether the person was integrated into the enterprise or remained apart from, and independent of, it5. However, while both of these factors are still pertinent, the modern starting point for deciding whether a contract of service (now generally referred to as a 'contract of employment') 6 exists is to ascertain if:

(1) the servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master ('mutuality of obligation');

(2) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master ('control'); and

(3) the other provisions of the contract are consistent with its being a contract of service.

The final classification of an individual now depends upon a balance of all relevant factors, fine though that balance sometimes might be, with 'mutuality of obligation' and 'control' being seen as the 'irreducible minimum' legal requirements for the existence of a contract of employment. The factors taken into consideration may include: the method of payment; any obligation to work only for that employer; stipulations as to hours; overtime, holidays etc.; arrangements for payment of income tax and national insurance contributions; how the contract may be terminated; whether the individual may delegate work; who provides tools and equipment; and who, ultimately, bears the risk of loss and the chance of profit. In some cases the nature of the work itself may be an important consideration.

The way in which the parties themselves treat the contract and the way in which they describe and operate it are not decisive; and a court or tribunal must consider the categorization of the person in question objectively. Thus a person could have been described as self-employed during the currency of the engagement but, on its termination, claim to have been in fact an employee for the purpose of claiming unfair dismissal, although such a course of action could have unfortunate taxation implications.

In many employments, the contract will not be discernible just from one document, but will require consideration of several documents, oral exchanges (for example, at interview) and subsequent conduct. In a case of what is often referred to as 'a typical employment', such as temporary or casual work, sporadic work or homeworking, it may be appropriate, when deciding on the employment status of an individual subject to such a regime, to consider whether there is sufficient mutuality of obligations to justify a finding that there was a contract of employment.”

25. In Laulea –v- Tai-Fi Fisheries Ltd [2013] FJHC 400; HBC 34.2009 (12 August 2013) Amaratunga J held that the control test approach was the appropriate common law approach for determining of an employee-employer relationship for unskilled workers stating –

‘In the circumstances, the common law approach to his issue varies from one jurisdiction to another, but the control test is widely used for unskilled workers, similar to the Plaintiff's work. The test of control deviates from being a determinative factor depending on the skill and judgment of the employee in the exercise of his employment. From the common law in Fiji it is safe to deduce, that the unskilled worker like the Plaintiff has to establish a degree of control by the Defendant to succeed in this action to prove his employment with the Defendant. In his evidence he has failed to do so’. (underlining my emphasis).

26. In Laulea (Supra) the Plaintiff was held not to be an employee as his wages was given directly from the Plaintiff as opposed to deposits in the bank as it was convenient to do so but that no FNPF was deducted and withholding tax was also deducted from his wages. The defendant had facilitated work in the vessel for the Plaintiff, although the Plaintiff had control over the type of work that the Plaintiff performed, it was held that the Plaintiff was not an employee.

27. Similarly in FNPF –v- Fiji Mocambo Ltd [1992] FijiLwRp 32; [1992] 38 FLR117 (1 July 1992) JA Kapi. JA Tikaram and JA Helsham stated that the nature of the contract will determine the relationship of the band. The relationship of the band with its employer was determined by facts and the interpretation of the contract was determined by law. He held that the terms of ‘control’ should be part of the terms of Agreement with the band and that the Employer treated the band as a contract for services by deducting a withholding tax of 15% from their pay. That although there was some form of control in the manner Mocambo required the band to perform, this approach was not sufficient to establish the relationship of the band to the company as an employee.

28. Therefore when considering these cases, the common factors considered are the terms of control and the manner of remuneration and tax. In the Court records in this case, the evidences from the Appellant was that the Respondent was not paid FNPF. He was only paid wages weekly and no tax was deducted.
29. Furthermore according to the evidences from the Appellant during trial, no other leave entitlements- annual leaves, no bereavement and sick leaves and also overtime pay were offered to him and that he became a permanent employee after 17 November 2017, 8 days after the injury he suffered whilst at work and later terminated on 29 November 2017.
30. In the letter of settlement between the parties as attached to the accident report and tendered as evidence, the letter concluded that ‘the Respondent was entitled to full pay for all his sick leaves and annual leaves entitlements and having exhausted these, adequate provisions of the ERA would follow.’
31. The Appellant argued that the Respondent was never entitled to any of these as he was contracted for service and he had never entered into a contract of service.
32. The Tribunal however failed to consider whether the settlement agreed upon by the parties was in accordance with the form and conduct of the parties pertaining to the work that the Respondent was required to perform as well as the tests in common law.
33. When considering the tests in common law, the Court found that the favourable conditions of work were offered to the Respondent to enable him to continue to provide his services is not of itself an acquiescence to orally contract the Respondent to a Contract of service.
34. I find that the terms of his service did not provide specific arrangements for his pay, his tax emoluments, his superannuation, his leave entitlements and the chain of delegation and supervision similar to that of a contract of service.
35. The Tribunal may have thought that the Respondent was employed by the Appellant given his favourable working conditions. However they were not of itself a basis to contract him as an employee. The conditions of work offering him an accommodation and workshop facilities ensured that he provided his services continuously when required to do so by the Appellant.
36. The Respondent gave his evidence at trial that he was not allowed to go anywhere else away from the premises unless agreed upon by the Appellant. As an independent contractor accommodated on site, he was responsible to look after the site as well as the workshop and had to make proper communications if he intended to leave the premises or to offer his services elsewhere. I don’t think he was not allowed to provide his services elsewhere, he was prohibited from using the site to produce the same product for his other contractual arrangements unless consented to by the Appellant.
37. Furthermore the Appellants evidences was that the Respondent was not paid superannuation funds. The Court finds that the non-payment of superannuation is one of the factors to determine his relationship to the Applicant as an independent Contractor.
38. In Hassan –v- Transport Workers Union [2006] FJSC 11; CBV 0006V.2005 (19 October 2006) Fatiaki JA, P, French J.A and Handley J.A determined that –

[74] Taxi drivers who do not own their taxis are a category of workers whose contractual arrangements with owners or suppliers of their taxis have long been the subject of judicial consideration. In Fowler v Locke (1872) 7 LRCP 272 the owner of a horse and cab let it out for hire to a driver who paid 18 shillings a day and took the rest of the profit or loss upon himself. Grove J observed that the cab man was under no control as to his movements by the cab owner. He could make special bargains with the public. He was not carrying out any directions of the owner. There was no provision for notice of dismissal but only a refusal to supply cab and horse on non-payment. There were no correlative duties beyond those of bailor and bailee. He said (at 280):

"I feel obliged to come to the conclusion that the cab man is not the servant of the cab-owner."

[75] Byles J said (at 281):

"The driver, as between the cab-owner and himself seems to me to have the complete and exclusive control and disposition of the vehicle within a certain district, and not to be a servant of the proprietor."

In rejecting the characterization of the relationship between the owner and driver as that of employer and employee, the decision reflected an application of the control test discussed earlier.

[76] The standard contract between Mr. Hassan and his drivers involve the

following elements:

1. Each driver was assigned a Sanyo taxi in which to offer taxi services to members of the public for a fare which was to be paid by the member of the public to the driver. Each driver had to pay $66 daily to Mr. Hassan and could retain the rest of his takings.
   
2. The area in which the driver could operate the cab was defined by reference to Suva, Deuba along Queens Road, and Tailevu along Kings Road. The cab could not be used outside these areas without Mr. Hassan’s permission.
   
3. The cab was restricted to the driver’s personal use only and could not be made available to others to drive.
   
4. The driver could not undertake repair work on the cab other than in an emergency and then only sufficient to drive it to the nearest garage.
   
5. The driver was liable in the event of an accident for which the driver was at fault while using the vehicle for private purposes. It is implicit in this provision that the driver was free to use the vehicle for his own purposes.
   
6. The driver was required to bring the vehicle in for inspection by management each day.
   
7. Under clause 11 of the agreement it was provided "the company shall have no control over the Employee’s daily driving". The reference to employee may have been a slip but in any event it cannot be conclusive. There was no express provision for termination by Sanyo however drivers were required to give one week’s notice of termination "except in the casual dismissal" whatever that may mean.

[77] There was a control radio dispatch system as appears from the Sanyo letterhead. And there was evidence that Sanyo had eleven regular clients. There was no evidence that drivers were or could be directed to pick up someone for a regular customer or any other customer phoning for a cab. There was no evidence to suggest that the system was not one of bidding for jobs in the usual way.

[78] The finding of the Court of Appeal that Sanyo was "a tightly organized and controlled operation of which the drivers were an essential part" in our judgment was not supported by any evidence that such control was exercised.

39. In Hassan (Supra) it must be noted that despite the written terms and conditions of arrangements between the drivers and the owners of the vehicle, the Supreme Court still held that there was no employee\employer relationship as there was no evidence of control.
40. In this instance, there are no stringent terms and conditions. However there were some benefits offered to the Respondent that was not available to other Contractors and employees. These benefits did not of itself constitute a contract of service. The very essence of his work, which was to produce rubbish tins was not controlled in any way by the Respondent. The Respondent had the liberty to produce the products in any form as long as it was in accordance with the shape and sizes required by the Appellant.
41. I find that there was insufficient evidence to establish that the Respondent was an Employee and hence finds that he was an Independent Contractor.
42. The Court therefore finds that the Appellant has succeeded on all the four grounds and therefore will quash the decision of the Tribunal and set it aside.
43. The Court finds that there was no employer/employee relationship and hence the Respondent is not entitled to Workmen’s Compensation.

Orders

44. The Court will:
    
    • (i) The Grounds of Appeal succeed;
    • (ii) Decision of the learned Tribunal is quashed;
    • (iii) Costs against the Respondent for $700.00.
      

.................................................
Senileba L.T.T.W- Levaci [Mrs]
A/Judge