Kabuaua v CCB Envico Pty Ltd [2021] KICA 1; Civil Appeal 3 of 2020 (26 November 2021)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

Civil Appeal No. 3 of 2020

[WINIUEA KABUAUA APPELLANT
[
BETWEEN [AND
[
[CCB ENVICO PTY LTD RESPONDENT

Before: Blanchard JA

Hansen JA

Heath JA

Hearing: 23 November 2021

Judgment: 26 November 2021

Counsel: Ms E. Karakaua for the Appellant

Ms B. Maitinnara for the Respondent

JUDGMENT OF THE COURT

Introduction

[1] The appellant was injured while working on a Government project in 2017. His legs were broken when a large pipe fell from a bulldozer and landed on his thighs. His claim under the Workmen’s Compensation Ordinance [Cap 102] (the Ordinance) was dismissed in the High Court. The Chief Justice held he could not recover as he was not employed by the respondent at the time of the accident.
[2] The appellant appeals on the ground that the Chief Justice erred in finding he was not employed by the respondent.

Further background

[3] The appellant was employed by the respondent in 2015. Initially he worked as a draughtsman. From 2017 this changed to laying pipes on construction sites. He was paid $5.00 an hour for eight hours work a day, six days a week. There was no written record of his terms of employment. He was told of his conditions of employment at an oral briefing.
[4] On 18 February 2016 the respondent entered into a written agreement with Derek Andrewartha trading as One Stop (the One Stop Agreement). The appellant knew nothing of the agreement. It made no difference to the conditions of his employment or the way in which his work was managed. He continued to be supervised by and answer to the defendant’s management. The only change to the previous arrangements was that his wages and those of other workers were delivered to the site by someone from One Stop. He deposed that it was made clear to them that they continued to be employed by the respondent and One Stop was tasked only to deliver their wages.
[5] The appellant said that the accident occurred on a Saturday. He was working on the site. The bulldozer from which the pipe fell was being driven by an Australian employed by the respondent who was his supervisor at the time.

Relevant legislation

[6] An employee’s right to be compensated for an injury sustained in the course of his employment arises under s 5(1) of the Ordinance which provides that an employer is liable to pay compensation to a workman who suffers a personal injury by accident arising out of and in the course of his employment.
[7] “Workman” is defined in s 2(1) of the Ordinance which relevantly provides:

2.(1) In this Ordinance, unless the context otherwise requires, the expression “workman”, subject to section 4 and the proviso to this subsection, means any person who has, either before or after the commencement of this Ordinance, entered into or works under a contract of service or apprenticeship with an employer whether by way of manual labour, clerical work, or otherwise, and whether the contract is expressed or implied, is oral or in writing and includes any person under training (hereinafter referred to as a trainee) who is required to perform work which would if not performed by the trainee have had in the ordinary course of events to be performed by a workman as otherwise defined by this subsection:

Provided that the following persons are excepted from the definition of “workman”.

(a) any person employed otherwise than by way of manual labour whose earnings exceed $10,000 a year; or

...

[8] “Employer’ is defined in s 3(1) of the Ordinance as follows:

“employer” includes [the Government of Kiribati] and any body of persons corporate or unincorporate and the legal personal representative of a deceased employer, and, where the services of a workman are temporarily lent or let on hire to another person by the person with whom they workman has entered into a contract of service or apprenticeship, the latter shall for the purposes of this Ordinance, be deemed to continue to be the employer of the workman whilst he is working for that other person; and in relation to a person employed for the purposes of any game or recreation and engaged or paid through a club, the manager, or members of the managing committee of the club shall, for the purposes of this Ordinance, be deemed to be the employer;

High Court Judgment

[9] In the High Court, the respondent disputed liability on two grounds:

• It was not the employer of the appellant at the time of the accident.
• The appellant was not a workman as defined as he earned more than $10,000 per annum.

[10] The Chief Justice dealt with the first issue only. He began by referring to the factors that determine whether an employment relationship exists, identified in the authorities he referred to as:

• (a) The master’s power of selecting his servants;
• (b) The payment of wages or other remuneration;
• (c) The master’s right to control in a general manner the work to be done;
• (d) The master’s right of suspension or dismissal.

[11] The Chief Justice referred to the terms of the One Stop Agreement which, in his view, indicated that the appellant was not employed by the defendant. They were clauses 4.1, 5.1 and 5.2 which provide as follows:

“ONE STOP shall be responsible for the following:

(a) Engaging suitable workers;

(b) Vetting worker’s suitability;

(c) Ensuring all workers are adequately trained to perform their duties in accordance with the requirements of CCB, and that refresher training is provided at least once each year;

(d) Remuneration of the workers, in strict accordance with conditions of employment and law; and

(e) Any other matters concerning the welfare of the workers or as required by law.

5.1 ONE STOP again is retained by the CCB only for the purpose and to the extent sent forth in this Agreement and ONE STOP’s relationship to the CCB during the term of this Agreement is that of an Independent Contractor.

5.2 ONE STOP and workers shall not be considered as having an employee status or as being entitled to participate in any plans, arrangements or distributions by the CCB pertaining to or in connection with any pension, bonus, or other benefit extended to CCB staff or employees.”

[12] The Chief Justice concluded:

21. When one considers the four tests of employment under common law, three of them clearly point to One Stop rather than the defendant as the employer of the plaintiff. The control test, however, in my view, did not fall squarely on the defendant, although the defendant did have some control over the work to be done by the plaintiff. One Stop, under the Labour Agreement, did have some general control also over the workers, by ensuring the suitability of the workers to do the work required by them, as well as ensuring that the workers were able to perform the duties required of them.
22. In my view, the right to exercise general control of the work and workers in this case was a shared between the defendant and One Stop with the latter having more direct control and superintendence over the workers and their work performance in the Project: see Short-v-J and W Henderson Ltd.
23. Since February 2016, by virtue of the Labour Agreement between the defendant and One Stop, there was created a mutual obligation between One Stop and the plaintiff whereby the plaintiff supplied his labour to One Stop for the use of the defendant and in return One Stop paid the plaintiff for that supply of labour. The Labour also created an obligation to One Stop to provide employment to the plaintiff who in return was obliged to provide his labour.
24. This in my judgment, and on the evidence before the Court, I find and hold that in law, the defendant was not the employer of the plaintiff since 18 February 2016. The accident complained of in this case occurred on 11 November 2017 at which time the defendant was no longer the employer of the plaintiff.

Appellant’s case

[13] For the appellant, it was submitted that the evidence established that the respondent was the appellant’s employer. Ms Karakaua contended that while One Stop was contracted by the respondent to recruit and pay workers, those functions were executed at the behest of the respondent. It could direct One Stop to replace staff deemed by the respondent to be unsatisfactory (clause 4.2(c)) and was required to reimburse One Stop for the wages paid. Otherwise, it was said that One Stop had no involvement with the workers on the project on which they worked and could not in any meaningful way have been the appellant’s employer.

The respondent’s position

[14] The respondent defended the High Court Judgment. The terms of the One Stop Agreement are relied upon to show that One Stop, not the respondent, was the employer. The respondent also relies on the second line of defence advanced in the High Court: that the appellant earned more than $10,000 per annum and was therefore not a workman as defined.

Discussion

[15] The definitions of “workman” and “employer” both require that a contract of service or apprenticeship exist between the workman and the employer. A workman is a person who has entered into a contract of service with an employer.
[16] The evidence establishes that the appellant and the respondent entered into a contract of service. The critical question is whether that contract of service existed when the appellant was injured. If it did, the appellant and the respondent are, respectively, workman and employer unless the proviso to s 2(1) applies to exclude the appellant from the definition of workman.
[17] The contract of service between the appellant and the respondent will have been in existence at the time of the accident unless it was brought to an end when the respondent entered into the One Stop Agreement. It could have been brought to an end then and replaced by a contract of service with One Stop only by the agreement of the parties – the appellant, the respondent and One Stop. There is no evidence that such an agreement was made.
[18] It was not suggested that the appellant agreed to the termination of his contract with the respondent and to replace it with a contract with One Stop. He was not consulted about the change. He was told his wages would be paid by One Stop but that he would continue to be employed by the respondent. His evidence in this regard was unchallenged. In cross-examination he denied that he had been engaged by One Stop.
[19] Alistair Cussack, the Project Director of the respondent, asserted in his evidence that the appellant was employed by One Stop, referring to clause 4.1(d) of the One Stop Agreement, but he did not suggest that the Appellant agreed to any such arrangement. There was no evidence by or on behalf of One Stop.
[20] It is clear that, for reasons that were never explained, the respondent contracted with One Stop to provide labour for the project and to discharge certain of the respondent’s obligations to its employees. But it was a bilateral arrangement to which the employees of the respondent were not a party. The One Stop Agreement existed independently of and did not affect the contract of service between the appellant and the respondent. That contract undoubtedly subsisted when the appellant was injured.
[21] The proviso in subparagraph (a) to s 2(1) of the Ordinance excepts any person employed otherwise than by way of manual labour whose earnings exceed $10,000 a year. There is evidence, that if the appellant worked eight hours a day for six days a week for a year he would earn more than $10,000. However, he was not employed “otherwise than by way of manual labour”. He was initially employed as a draughtsman but in 2017 he worked at the construction sites laying pipes. That is where he was when the accident occurred. The proviso has no application.
[22] The appellant is accordingly a workman, employed by the respondent, who is entitled to be paid compensation under the Ordinance.

Result

[23] The appeal is accordingly allowed. The decision of the High Court is quashed. As the issue of quantum was not determined in the High Court, that aspect of the claim is remitted back to the High Court for determination.
[24] The appellant is entitled to costs in the High Court and on appeal to this Court, to be agreed or taxed.

Dated 26^th day of November 2021.

Blanchard JA

Hansen JA

Heath JA