Premium assessment

This case study demonstrates:

• If contractors undertaking ‘additional work’ are ‘workers’ according to the Act.
• If the total sums paid to workers, in this case drivers, should be treated as wages, or whether some lesser sum should be applied.

Background

Deplin Pty Ltd was a company which conducted a business known as Team Taxi Trucks and Couriers. The business was, in essence, a taxi transport company for larger goods and involved transportation of goods to and from various locations primarily in and around southeast Queensland. Because of the wide variety of transport tasks requested of Deplin from time to time, it was necessary for Deplin to have access to a very wide range of vehicles. Deplin put in place a set of arrangements whereby it could gain access to a range of additional vehicles with contract drivers, so as to provide a supplementary capacity to the fleet owned and operated by Deplin.

The facts

Between November 2008 and June 2009, WorkCover Queensland conducted a wages audit of Deplin, and determined that the contractors undertaking the ‘additional work’ engaged by Deplin were ‘workers’ according to the Act. A Reassessment Premium Notice was issued increasing the premium payable by Deplin from $27 948.13 to $167 524.80. Deplin appealed the decision by WorkCover by lodging an Application for Review with Q-COMP. On 17 September 2009 Q-COMP affirmed the decision of WorkCover.

This was an appeal by Deplin Pty Ltd pursuant to s. 550 of Queensland's Workers' Compensation and Rehabilitation Act 2003 (the Act) against a decision of the Review Unit of the First Respondent Q-COMP dated 17 September 2009 in relation to the amount of the insurance premium assessed against the appellant under the Act. The following was submitted by Delpin:

1. the persons concerned are not ‘workers’ as defined, as they are independent contractors; and
2. even if the contractors are workers, the Reassessment of Premium Notice has wrongly included within the amount of wages assessed for the purposes of the Act, the entire gross amount paid by the Appellant to the subcontractor drivers, which includes the entire sum paid to those drivers in respect of the provision and use of the motor vehicles which are the central purpose of the contract of engagement and does not exclude allowances paid in respect of the expense of motor vehicle.

Judgement

Under the judgment delivered by Industrial Magistrate Cridland on 24 January 2011, Deplin's appeal against WorkCover's premium assessment was dismissed.
As to the primary issue on appeal, namely ‘wages’, Magistrate Cridland adopted the reasoning in Reliable Couriers that because the nature of the work could not be identified, the ‘results test’ under section 2(a)(i) of Schedule 2 Part 1 was not satisfied, such that the drivers must be considered to be ‘workers’.

The secondary issue on appeal was whether or not the total sums paid to drivers should be treated as wages, or whether some lesser sum should be applied. Deplin's argument was that the sums paid to the workers include the costs of providing a vehicle, and therefore are not paid solely in respect of the workers labour. As such, less than the full sum paid to the drivers should be treated as wages. This issue of course had been decided already by Magistrate Lee in WorkCover Queensland v Q-COMP and Allied Express Transport Pty Ltd. Magistrate Cridland in this matter simply adopted the reasoning in the Allied Express Transport case. The reasoning again was quite brief, but his ultimate finding was as follows:
‘Having considered all the evidence before me and the decision of Magistrate Lee that I have been referred to I am not satisfied that the Appellant has established that any part of the sums paid to drivers was not wages as defined by the Act’.