Associated Translators & Linguists Pty Limited v Commissioner of Taxation AATA 260
(Decision by: Mr S E Frost, Senior Member)
Associated Translators & Linguists Pty Limited
v.Commissioner of Taxation
Mr S E Frost, Senior Member
superannuation guarantee shortfall
whether employees or independent contractors
factors to be taken into account
lack of power to delegate
remuneration based on expenditure of time
decision under review is affirmed
Superannuation Guarantee (Administration) Act 1992 - s 12
Hollis v Vabu Pty Ltd - (2001) 207 CLR 21
Humberstone v Northern Timber Mills - (1949) 79 CLR 389
Stevens v Brodribb Sawmilling Co Pty Ltd - (1986) 160 CLR 16
Vabu Pty Ltd v Commissioner of Taxation - (1996) 33 ATR 537
Decision date: 14 April 2010
Mr S E Frost, Senior Member
1. The applicant taxpayer, Associated Translators & Linguists Pty Limited ('ATL'), provides its clients with interpreting and translation services in over 90 languages. Through the use of its panel of over 1,000 interpreters and translators, it conducts between 1,300 and 1,500 client assignments per month.
2. Rakesh Sani became an ATL panel interpreter in February 2003. ATL regarded Mr Sani as an independent contractor rather than an employee, and for that reason it did not make any superannuation contributions for him.
3. The Commissioner has taken the view that Mr Sani was an employee of ATL. It follows, according to the Commissioner, that ATL has a "superannuation guarantee shortfall" under the Superannuation Guarantee (Administration) Act 1992 (the SGA Act). ATL objected against the superannuation guarantee charge assessments that the Commissioner made, and although the objections were allowed in part, the extent to which the objections were disallowed was based on the Commissioner's view that Mr Sani was an employee of ATL for the purposes of the SGA Act. ATL has applied to the Tribunal for review of those objection decisions.
4. The only issue for determination is whether Mr Sani was an employee of ATL for the purposes of the SGA Act. If he was an employee, then ATL should have made superannuation contributions for him and the objection decisions will need to be affirmed. If he was not an employee, then ATL will not need to have made superannuation contributions, there will be no shortfall and the objection decisions will need to be set aside.
5. While the issue for determination concerns only the relationship between ATL and Mr Sani, it may be assumed that my decision on that question will have broader ramifications for ATL. Indeed, during the hearing I was informed by counsel for the Commissioner that, although this application was heard in the Small Taxation Claims Tribunal because of the relatively modest amount of tax in dispute, "this is not necessarily a small tax matter". The evidence before the Tribunal traversed not only the specific arrangements between ATL and Mr Sani, but also the general practices of ATL's business, including the way in which it allocated interpreting and translation assignments to the workers (I use "workers" as a neutral expression, so as to suggest neither that they are, nor that they are not, employees of ATL), the expectations placed by ATL on the workers, the way workers were paid, and similar matters. The parties appeared to accept that those general practices applied to Mr Sani just as much as they applied to ATL's other panel interpreters and translators.
6. Section 12 of the SGA Act provides relevantly:
- Subject to this section, in this Act,
have their ordinary meaning. However, for the purposes of this Act, subsections (2) to (11):
- expand the meaning of those terms; and
- make particular provision to avoid doubt as to the status of certain persons.
- If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.
7. To determine the issue identified above will require a two-stage approach. The first stage is to consider whether Mr Sani was an employee within the ordinary meaning of that word. If he was, then the enquiry is complete. But if he was not an employee within that ordinary meaning, it will be necessary to move to the second stage of the enquiry, which is to consider whether he was an employee under the extended definition in subsection 12(3) - in other words, whether he worked under a contract that was "wholly or principally for [his] labour".
8. In examining whether a person is an "employee" of another, the courts have taken into account various factors. These include the level of control exercised, or capable of being exercised, over the worker; the worker's ability to delegate tasks to another; whether the worker supplies his own tools or equipment; and the level of financial risk the worker takes. Ultimately the enquiry is whether the worker is performing his tasks for himself (as would be the case if he were conducting his own business) under a contract for services, or for the organisation which engages him under what would be characterised as a contract of service.
9. The question is often not easy to answer. As Wilson and Dawson JJ said in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 (Stevens v Brodribb) at 35:
The modern approach is ... to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances.
10. It is against that background that I explore the relationship between ATL and the panel interpreters, including Mr Sani.
THE RELATIONSHIP BETWEEN ATL AND MR SANI - THE DOCUMENTARY BACKGROUND
11. In June 2002 Mr Sani forwarded his credentials to ATL and asked for "the opportunity to show you how I can help your service meet its goals". After examining his background and qualifications, ATL decided that he was appropriately qualified to be appointed to ATL's panel.
12. On 24 February 2003 Mr Sani signed what appears to be a standard form agreement, entitled "Terms of Engagement and Code of Ethics" ('the standard agreement'), with ATL. The standard agreement noted that ATL (referred to as the Principal) and Mr Sani (referred to as the Independent Contractor) were "desirous of evidencing the terms of engagements between the Principal and the Independent Contractor and to establish a standard of conduct and ethical behaviour". The agreement provided as follows (all bold or underlining emphasis is as it appears in the original):
- The Independent Contractor agrees to abide by The Australian Institute of Interpreters and Translators (AUSIT) Code Of Ethics for Interpreters & Translators - June 1996, supplemented by ATL's clauses 2 to 18 herewith.
- The Principal recognises the freedom of the Independent Contractor to engage in business.
- The Independent Contractor covenants not to solicit Clients of the Principal and enter into direct agreement or agreements with the said Client or Clients.
- The Clients of the Principal are those in which the books of accounts reveal as being debtors to the Principal or those in which accounts are issued but not due for payment.
- The scale of fees that are applicable for services rendered are those determined by the Board of the Principal.
- The terms of payment for interpreting services are that the Independent Contractor shall be paid on a monthly basis for all
irrespective of whether ATL has been paid or not. For assignments undertaken during any given month you will be paid on the 15th of the following month. The following guidelines will apply when dealing with bad or disputed accounts:-
- If an account is not paid due to the client being declared bankrupt or the client's failure to honour their 'undertaking' then ATL will accept responsibility and the interpreter will be paid for his/her services.
- If a client refuses to pay an account on the basis that he/she was not satisfied with the quality of service provided by the interpreter (ie. interpreter was late, etc), such complaints shall be referred to the interpreter for his/her comments. Should the complaint be found to be of substance then we reserve the right to reduce/waive such fees and recover same from the Independent Contractor
- Translators are paid on the 15th of the following month subject to completion of all phases of the project and ATL having issued an Invoice.
- That the Independent Contractor covenants to orally confirm the following details of engagement agreed upon with the Principal:-
a) Date b) Venue c) Time d) The name of the matter.
- That the Independent Contractor covenants to punctually comply with appointment times of each booking and with any terms so specified by the Principal and duly agreed upon by the Independent Contractor.
- In the event that a client of the Principal solicits the Independent Contractor to enter into direct agreement to render professional services the Independent Contractor has a duty to refer the matter to the Principal for allocation.
- Where further or repeat business arises as a result of the Independent Contractor referring the Client back to the Principal the Independent Contractor shall have first right of refusal or acceptance of the proposed engagement.
- Where an Independent Contractor through no fault of their own are unable to keep a booking appointment an obligation is placed on the said party to notify the Principal within 24 hours of the event that prohibited the said party from fulfilling the engagement.
- Where an Independent Contractor fails to keep appointments as a result of accepting an engagement from other sources then this act will constitute a fundamental breach of the agreement of the terms of Engagement and will entitle the Principal to pursue any legal remedy.
- Upon completion of an assignment the Independent Contractor has an obligation to notify the Principal within twenty four (24) hours and to supply the information of the time taken in carrying out the face to face assignment.
- The Independent Contractor shall not communicate to any party the subject matter of the particular assignment without the permission of the Principal. The Independent Contractor acknowledges that such information is private and or confidential and being property of the Client of the Principal.
- The Independent Contractor has an obligation to ensure that their attire is clean and pressed when they are appearing for any engagement booked from the Principal.
- The Independent Contractor has an obligation to be courteous to all parties that are involved with the particular assignment.
- Where the Independent Contractor has a grievance against any party who is involved in any engagement where the services of the Independent Contractor has been rendered, the said party has an obligation to advise the Principal of the grievance or complaint with the object that a remedy be provided in circumstances of just cause or excuse for the complaint or grievance.
13. Although clause 1 of the standard agreement refers to a 1996 Code of Ethics, the version of the Code that was in force at the time of the agreement is dated 2000. I will refer to this version as the 2000 AUSIT Code of Ethics.
14. The 2000 AUSIT Code of Ethics sets out eight general principles, explained in the following way:
1. PROFESSIONAL CONDUCT
Interpreters and translators shall at all times act in accordance with the standards of conduct and decorum appropriate to the aims of AUSIT, the national professional association of Interpreting and Translation practitioners.
Interpreters and translators shall not disclose information acquired during the course of their assignments.
Interpreters and translators shall undertake only work which they are competent to perform in the language areas for which they are "accredited" or "recognised" by NAATI [the National Accreditation Authority for Translators and Interpreters].
Interpreters and translators shall observe impartiality in all professional contracts.
Interpreters and translators shall take all reasonable care to be accurate.
Interpreters and translators shall be responsible for the quality of their work, whether as freelance practitioners or employed practitioners of interpreting and translation agencies and other employees.
7. PROFESSIONAL DEVELOPMENT
Interpreters and translators shall continue to develop their professional knowledge and skills.
8. PROFESSIONAL SOLIDARITY
Interpreters and translators shall respect and support their fellow professionals.
15. The Code elaborates on those general principles by setting out what are called "annotations" to them. The most relevant of these "annotations" are:
1. c) Reliability
- Interpreters and translators and translators (sic) shall adhere to appointment times and deadlines; or in emergencies advise clients promptly.
- Interpreters and translators shall undertake appropriate preparations for all I/T assignments.
- Interpreters and translators shall complete interpreting and translation assignments they have accepted.
2. a) Information Sharing
- Interpreters and translators shall not sub-contract work to interpreting and translating colleagues without permission from their client.
3. a) Qualifications and Accreditation
- Interpreters and translators shall accept only interpreting and translation assignments, which they are competent to perform.
6. a) Freelance and Agency-employed Practitioners
- Interpreters and translators may work in interpreting and translation assignments as independent (freelance) professionals, or under contract to a commercial or government agency.
- In both instances, freelance and employed interpreters and translators shall abide by the AUSIT Code of Ethics.
- If this Code of Ethics and an employing agency's directions are in conflict, interpreters and translators shall abide by the Code of Ethics, and if necessary, withdraw from the assignment.
THE REMAINDER OF THE RELATIONSHIP BETWEEN ATL AND MR SANI
16. The other elements of the arrangement between ATL and Mr Sani were the oral agreement between them at the time of allocation of an assignment, and the general work practices that existed in relation to the conduct of the assignment, the reporting of it and the consequential arrangements surrounding the claiming and payment of fees.
Allocation of assignments
17. There are two broad types of assignments allocated to panel members: assignments involving "interpreting" services and assignments involving "translating" services.
18. Generally, "interpreting" services are provided face to face. Typically the interpreter will attend the venue nominated by the client. The interpreter facilitates communication between two or more parties, where not all of them speak or understand English. The foreign language speech is translated into English for the benefit of the English speakers; the English speech is translated into the foreign language for the benefit of the non-English speakers. "Translating" services involve rendering a document into the English language from a foreign language, or vice versa. Sometimes, a translating service is also provided in the course of an interpreting service.
19. The methods by which ATL receives requests for interpreting and translating services and then allocates the assignments to its panel members were explained in written and oral evidence given by Mr Maurice Aliprandi, the managing director, and Ms Santina Speranza, the office manager and a former booking clerk, of ATL. On the basis of their evidence, I find the facts to be as follows.
20. As far as interpreting assignments are concerned, a client (typically a court or tribunal, an insurance company, a lawyer or a medical practitioner) will approach ATL with a request for an interpreter proficient in interpreting from English to a particular foreign language and from that foreign language to English. The client will indicate to ATL the nature of the assignment, where and when it is to be undertaken and the estimated duration of the assignment. It will be the responsibility of one of ATL's booking clerks to allocate the assignment to an appropriate interpreter. The general preference of ATL is to allocate the assignment to one of the two full-time interpreters employed by ATL, but if that is not possible, then the assignment will be offered to one of the panel interpreters. If there are special requirements of the client (for example, some clients require an interpreter of a particular gender, or age, or cultural background), then the booking clerk will take those requirements into account in the allocation of the assignment.
21. Panel members are entitled to decline an assignment that is offered to them if for some reason they do not want to undertake it. This option might be taken because, for example, the time or the location of the assignment is inconvenient. However, consistently with clause 9 of the standard agreement with ATL and with clauses 1(c)(i) and 1(c)(iii) of the 2000 AUSIT Code of Ethics, a panel member who accepts an assignment is generally expected to undertake it, and to do so on the terms (if any) specified by the client.
22. Translation assignments are dealt with in much the same way. A client will notify ATL that it needs a document translated from English into a foreign language or vice versa. ATL's "translation coordinator", who is responsible for allocating translation assignments, will offer the assignment to one of the panel translators accredited in the particular language. If that translator is interested in the assignment, the translator and the coordinator will discuss the assignment in detail (in particular, the length of the document, and the deadline for completing the assignment) and the translator will then either accept or decline the assignment. If it is declined, then the coordinator will repeat the exercise with other translators, one at a time, until someone accepts the assignment.
23. With translation assignments, as with interpreting assignments, a panel member who accepts an assignment is generally expected to undertake it according to the client's requirements: see clauses 1(c)(i) and 1(c)(iii) of the AUSIT Code of Ethics.
"Delegation" of assignments
24. From time to time bookings are made with panel members who, because of some change in their circumstances, become unable (or perhaps unwilling) to undertake the assignment that they have accepted. What happens in those circumstances was the subject of much questioning of Mr Aliprandi and Ms Speranza, and before I make any findings on this issue it will be necessary to set out some of their oral and written evidence.
25. Ms Speranza said in her statement dated 1 December 2008 that:
 ... the individual (Interpreter or translator) rings our office and requests consent to delegate the duties of [an] interpreting or translation assignment to a particular interpreter or translator.
 Consistent with the direction and policy of the Applicant I confer a discretion on the booking clerks to make a decision in respect of requests for consent to delegate interpreting and translation services based upon the following criteria:
- Is the individual listed on ATL's panel if not
- Does the Applicant know of the individual nominated and if so has that person attained the requisite professional qualifications and or experience for example rare languages
- If not what are the requisite professional qualifications and experience of the delegated individual
- Where professional qualifications are available for main stream languages then NAATI professional or paraprofessionals plus 2 years experience would be immediately approved and lower levels are approved depending upon the degree of legal responsibility
- In the event that there are some special circumstances that preclude an immediate decision then the request to delegate will be referred usually immediately to me for a decision and in the event that there are further complications I will refer the matter to the General Manager. Professional standards and experience are a fundamental condition to support a request for consent to delegate in consequence of the duty of legal responsibility arising from the service provided.
26. Counsel for the Commissioner explored this topic in cross-examination:
MR BAMBAGIOTTI: On your understanding of ATL's business, when a translator or an interpreter has been allocated a job and they accept it, they can't get somebody else to go along and do the interpretation or translation unless they've told ATL first and unless approval has been given? --- That's correct.
27. That response was consistent with Ms Speranza's description of the process in her statement as one by which the interpreter "requests consent to delegate the duties". She repeated the same expression later in her statement.
28. Mr Aliprandi in his supplementary statement dated 6 April 2009, and specifically in reference to paragraph 7 of Ms Speranza's statement of 1 December 2008, said:
 The general policies of the Applicant are and have been, in relation to all translators and interpreters on the Applicant's panel, to permit a selected interpreter or translator to delegate an assignment subject to the proposed substitute meeting the following requirements:
- Special instructions of the clients of Applicant.
- The standard of competency required, which relates to experience and professional qualifications. At times a particularly high standard of competence is required for an assignment.
- Compliance with the code of conduct and fitness to practise.
29. Mr Aliprandi's oral evidence put a slightly different colour on the statement that ATL's general policies "permit a selected interpreter or translator to delegate an assignment ...". In response to a question from counsel for ATL, he gave evidence before the Tribunal as follows (emphasis added):
MR McKEAND: Just pausing there, can you tell the tribunal the - just briefly the circumstances in which either a delegation occurs, or a substitution - or what you have called assignment of the contract to another party occurs?
--- Excuse me, yes. It's a matter where the interpreter may find himself or herself unable to attend an assignment due to health, personal reasons, whatever. If - it is a standard instruction to contact our office in such a case. If we have enough time then the office is given the task of reassigning an interpreter. However, there are occasions where it's a very late notice. This morning for a 10 o'clock court matter and we get a phone call at 8 o'clock. In those instances we try our best within the office; however, if the interpreter offers the name of another interpreter who is able to attend, given that they're friends, provided it meets the client's specifications, then we agree for obvious reason, because we don't get into trouble with the doctor, or the court, or whatever. I did say meet specification. There are organisations like the Motor Accident Authority of New South Wales, Legal Aid, and so forth, where they specify the - an interpreter must be male or female, especially if it's a medical appointment and the - the client - - -
And that's an example of the specification?
--- Exactly. So it's a male or female. At times, we get to the case where it's even religion comes into account, which I probably try to avoid; and, hence - and, of course, the substitute interpreter must meet the accreditation requirement of the client. If they meet those requirement of the client. If they meet those requirements we have no objection whatsoever.
30. As I understood Mr Aliprandi's evidence, it is not normally left to the originally allocated interpreter (who has since become unavailable or unwilling to undertake the assignment) to decide who will undertake the assignment in his or her place. It is only where ATL's office staff has insufficient time to reallocate the assignment that the original interpreter's suggested "delegate" - although "substitute" may be a more appropriate label - will be able to undertake the assignment, and then only if ATL agrees. As Mr Aliprandi said, the "standard instruction" is for the interpreter to notify the office that an alternative interpreter will need to be found. If the office has enough time, then the office, rather than the original interpreter, will choose the person who is to undertake the assignment. If that is not possible, then the person suggested by the interpreter will be given the assignment, subject to accreditation and provided the client's requirements are met. As Mr Aliprandi described the process in his supplementary statement dated 6 April 2009:
 The granting of consent to delegate duties or to assign the contract by any interpreter accepting the interpreting assignment is subject to the delegate meeting the special instructions of the client. Apart from that requirement and satisfaction of the other matters in paragraph 2 [see paragraph 28 of these reasons], the delegation will be consented to.
31. I note that like Ms Speranza, Mr Aliprandi used the expression "consent to delegate duties" in his supplementary statement.
32. Later in his oral evidence, in response to a question from counsel for the Commissioner, Mr Aliprandi said this:
MR BAMBAGIOTTI: If an interpreter repeatedly said that they were unavailable but wanted their sister or wanted their brother or wanted their next-door-neighbour [to undertake the assignment in their place], and that happened over time, would that interpreter stay on your panel? --- After a few times the interpreter is given notice to give reasonable excuses as to why this is occurring on a frequent basis. If the excuses are not adequate, as we found out other times because that particular individual was setting up a company in competition against us, yes, we would remove them.
33. Mr Aliprandi stressed the point in his memorandum dated 6 October 2007 to ATL's panel interpreters and translators:
A matter of concern that has arisen recently is "where an Interpreter has accepted to carry out an assignment but he/she sends another Interpreter on his/her behalf without approval from ATL."
Often our Clients specify (with good reasons) the Gender and Nationality of the Interpreter and at times request other details such as the NAATI number and physical description of the attending practitioner. This information is NOT disclosed to you as our Interpreting coordinators match the Interpreter with the Client's requests.
We cannot stress enough the importance of you complying with the above. Many of our Clients such as [names deleted] have to comply with certain statutory obligations and it is encumbered (sic) upon us to carry out their instructions.
We again repeat, that if at the last minute (with good reasons) you find yourself unable to attend an assignment then please PHONE OUR OFFICE. You [may] put forward the name of an accredited practitioner but he/she must be approved by ATL.
Please note that failure to comply with the above is considered as a serious breach of the Code of Ethics and may lead to removal from our PANEL. (original emphasis)
34. I find that interpreters, once they accepted an assignment from ATL, did not have a general power to delegate the undertaking of the assignment to another interpreter. They were certainly free to suggest the name of an alternative interpreter if they could not undertake the assignment themselves, but the question whether the assignment could be undertaken by that alternative person ultimately rested with ATL.
35. There is no relevant distinction between that approach and what happens with regard to translation assignments, as Mr Aliprandi explained before the Tribunal:
MR McKEAND: You heard this morning, and you've been giving evidence about the occasions when interpreters don't do the job they were asked to do, usually because of a last-minute occurrence, and it's given to someone else. And the circumstances that then apply are that you may find through your organisation the alternative interpreter or the person who had the job may come up with an alternative interpreter who if technically accepted will get the job; correct? --- Yes.
Does that same system of giving that job to someone else apply to translators?
--- Yes, it does. Sometimes a translator may accept a substantial size translation and he or she find that it can't meet certain deadlines and consequently we get a phone call and say, "Look, can I use so and so to do some of the translations?" We say, "Fine."
36. Once again, with translation assignments as with interpreting assignments, the approach is to seek ATL's consent, rather than simply to hand the assignment to someone else.
Undertaking the assignment
37. Interpreting assignments are arranged for a particular time and location, and this information is communicated to the interpreter at the time of allocation of the assignment. Usually, a reasonable estimate of the duration of the assignment will also be given to the interpreter at that time. The interpreter will be expected to attend at the agreed time and location, and to be available for the estimated duration of the assignment.
38. The actual conduct of the assignment is entirely in the hands of the interpreter. The only practical conditions imposed on the interpreter by ATL are that the interpreter should be well presented and courteous, as required under clause 16 of the standard agreement.
39. There will usually be some sort of record kept of the event of which the assignment formed part. Examples of these types of records are:
- court or tribunal transcripts where the interpreter has interpreted the evidence of a witness;
- a written statement or affidavit made in preparation for legal proceedings;
- a doctor's clinical notes concerning a patient where the interpreter has facilitated the communication between the doctor and the patient;
- a completed accident claim form or questionnaire where the claimant cannot provide the information in English without assistance.
40. Of course, in a physical sense, ATL cannot oversee or monitor the conduct of the assignment, and in any event, it does not have the resources to be able to monitor assignments in every one of the languages that its panel members cover. Oversight or monitoring is undertaken more indirectly, and generally only as a matter of exception, in response to complaints made by dissatisfied clients.
41. Translation assignments are also conducted without any direct supervision by ATL. Sometimes, depending on the nature of the document, a second translator may be required to check and verify the translation. If there are any disagreements between the translators, and the disagreements cannot be resolved, a third translator may need to be consulted.
42. In a translation assignment, the end product for the client is the translated document.
Pricing methodology and the payment of fees
43. The fee to be paid by ATL to a panel member for an interpreting assignment is generally agreed at the time of allocation of the assignment. It is based on an hourly rate, multiplied by the estimated duration of the assignment. The hourly rate is about 65% of the rate payable to ATL by the client.
44. Under clause 14 of the standard agreement, an interpreter is required to report to ATL, within 24 hours of the completion of the assignment, how long the assignment took. Under clause 6, the interpreter is paid on the 15th of the month following the month in which the assignment is undertaken, and this is so even if the client has not paid ATL for the assignment.
45. If an assignment is estimated to take two hours, and the interpreter is available for that whole period, then the interpreter will be paid for two hours. This will be the case even if the assignment does not last as long as originally estimated. Correspondingly, the client would pay ATL a fee based on two hours' attendance.
46. If the assignment runs longer than expected, then the interpreter, if available, will continue to conduct the interpretation until the assignment is complete, and will be paid for the whole of the time spent. ATL would be entitled to a corresponding increase in its fee payable by the client. If the assignment cannot be completed then because the interpreter is unavailable, then both the interpreter and ATL will be paid in full for attendance on that day and the client will need to make a follow-up booking with ATL for the remainder of the assignment to be conducted at a different time. The same interpreter may or may not be allocated the second part of the assignment, depending on availability. Both the interpreter and ATL will be entitled to be paid for the second attendance.
47. If the interpreter arrives late then he or she will probably not receive the full fee. For example, if the interpreter arrives half an hour late for a two-hour assignment, the payment will be for only an hour and a half. The client will similarly pay ATL for only an hour and a half.
48. If the interpreter arrives on time but the client (or the doctor, or lawyer) is late, both ATL and the interpreter will be paid from the agreed starting time of the assignment.
49. If an assignment starts on time but the interpreter leaves early without completing the assignment, ATL would regard that as a serious breach of the Code of Ethics. The interpreter would not be paid at all for the assignment and would quite likely be removed from ATL's panel.
50. Cancellation fees are payable to interpreters if the client cancels the assignment at short notice. If the cancellation occurs after 2:00 p.m. on the day preceding the scheduled appointment, the cancellation fee is 66% of the assignment fee. If the cancellation occurs on the day of the scheduled appointment, the interpreter is paid the full fee for the assignment. Mr Aliprandi explained in his statement dated 3 November 2008:
The purpose of the cancellation payment is in recognition that the wholesale provider [that is, the panel interpreter] is working for himself and hence the payment is to compensate him or her from any opportunity lost from being offered other wholesale or retail engagements ...
51. Where the originally allocated interpreter tells ATL that he or she is no longer able to undertake the assignment but suggests a colleague instead, and ATL agrees to allocate the assignment to the colleague, the payment practices vary. Sometimes the original interpreter will ask to be paid for the assignment and will indicate to ATL that the payment will be passed on to the colleague. In other cases the original interpreter will ask ATL to pay the colleague direct. Generally ATL will make the payment in accordance with the interpreter's request.
52. Translation assignments are priced according to the length of the document being translated. As with interpreting assignments, the translator will receive, as a fee from ATL, around 65% of the fee ATL charges to the client. Where a second, "proofreading" translator is required, that second translator will receive 50% of the fee payable to the original translator.
The use of business cards by panel interpreters
53. ATL issues, at its own expense, business cards (or "identification cards" as Mr Aliprandi preferred to describe them) to its panel interpreters. The cards have the name, logo, address and contact details of ATL printed on them, together with the name of the interpreter, the identification of that person as an "ATL Panel Interpreter", and the person's NAATI accreditation number.
54. ATL's attitude to the use of the business cards is summarised in a memorandum issued by Mr Aliprandi to the panel interpreters on 14 February 2006 which included the following:
... I'm pleased to report that the vast majority of Interpreters are complying with our Client's (sic) request that when attending an assignment they provide the following:-
1. Proof that you are from ATL - by giving the Client your ATL personalised Business Card (BC)
2. Provide proof of your NAATI registration number - Show your NAATI ID or carry a copy of a letter from NAATI showing your registration number.
55. The fact that the business cards include the interpreter's NAATI accreditation number makes it unnecessary for the interpreters to carry the separate document envisaged by point 2 of the memorandum.
56. The following witnesses, all of whom have used the services of ATL, also gave evidence:
- Philippa Martin, a solicitor with the Legal Aid Commission of New South Wales;
- Dr Kim Edwards, a medico-legal consultant;
- Melody Martin, a physiotherapist; and
- Dr Andrew McClure, a psychiatrist.
Their evidence was that the business cards are a convenient way to confirm that the interpreter is an ATL panel interpreter and is properly accredited with NAATI.
Complaints about the interpreters
57. Sometimes clients complain about the services provided by the interpreters. This can be because of late attendance, non-attendance or the quality of the interpreting services provided. ATL encourages clients to put their complaints in writing.
58. Mr Aliprandi explained before the Tribunal that written complaints are forwarded to the interpreter for an explanation. Mr Aliprandi considers the explanation and, if he accepts that the interpreter's behaviour warrants no criticism, he generally forwards the interpreter's explanation, together with his own opinion, to the client.
59. where the interpreter's explanation is "inadequate", the interpreter will be subject to some sort of sanction - either a warning, or non-payment of the fee for the assignment, or an $11 penalty or fine (or "jolt" as Mr Aliprandi referred to it, "to remind them that they're not doing the right thing") or, in an extreme case, removal of the interpreter from the panel.
60. If the interpreter's behaviour, or performance, is such that ATL feels entitled to refuse to pay the interpreter for the assignment, then it will generally be the case that ATL's client will similarly feel entitled to refuse to pay ATL.
The interpreters working for themselves, or for entities other than ATL
61. Clause 3 of the standard agreement prohibits panel interpreters from soliciting ATL's clients. However, subject to that restriction, they are free to establish their own client base, and they are free to work for other entities. They are not allowed, without ATL's consent, to undertake work offered by an ATL client, but if they are asked to perform such work, and they refer the request to ATL, ATL will give them the first right of refusal or acceptance of the proposed engagement: clauses 10 and 11 of the standard agreement.
DO THESE FACTS DISCLOSE A RELATIONSHIP OF EMPLOYER AND EMPLOYEE?
62. The Commissioner's written submissions correctly noted that there is no one final and definitive test as to whether a person is an employee, at common law, as opposed to an independent contractor. ATL acknowledged the same point when it noted in its written submissions the High Court's warning in Stevens v Brodribb that, of the range of indicia of an employment relationship, the relevance and significance of each will vary from case to case.
63. The days when "control" of the worker was the most significant, and perhaps the only, factor in determining whether an employment relationship exists are well behind us. Over 60 years ago Dixon J said in Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404:
The regulation of industrial conditions and other laws have in many respects made the classical tests [of control and command] difficult of application and it may be that ultimately they will be re-stated in some modified form ...
64. In fact, the very notion of "control" appears to have shifted over the years as the relationship between businesses and those whom they engage has changed. Whereas once the typical "employee" was one who remained in the service of an employer during set working hours for the entire working week, nowadays more people are engaged for work, or "employed", on a part-time or a casual basis, in circumstances where the same level of control or command over the worker is impossible to exercise.
65. In Vabu Pty Ltd v Commissioner of Taxation (1996) 33 ATR 537, Meagher JA said at 538:
While it is almost never an easy task to decide whether a given person is an employee or an independent contractor, there is no doubt what the legal tests are. The old test of "control" is now superseded by something more flexible.
66. His Honour referred generally to the judgment of Mason J in Stevens v Brodribb, which included the following statements (emphasis added):
A prominent factor in determining the nature of the relationship between a person who engages another to perform work and the person so engaged is the degree of control which the former can exercise over the latter. It has been held, however, that the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it (Zuijs v. Wirth Brothers Pty Ltd (1955) 93 CLR 561, at p 571; Federal Commissioner of Taxation v. Barrett (1973) 129 CLR 395, at p 402; Humberstone v. Northern Timber Mills (1949) 79 CLR 389).
The power to delegate is an important factor in deciding whether a worker is a servant or an independent contractor (Australian Mutual Provident Society v. Chaplin (1978) 18 ALR 385, at p 391).
The traditional formulation, though attended with some complications in its application to a diverse range of factual circumstances (Federal Commissioner of Taxation v. Barrett, at p 400), nevertheless has had a long history of judicial acceptance. True it is that criticisms have been made of it. It is said that a test which places emphasis on control is more suited to the social conditions of earlier times in which a person engaging another to perform work could and did exercise closer and more direct supervision than is possible today. And it is said that in modern post-industrial society, technological developments have meant that a person so engaged often exercises a degree of skill and expertise inconsistent with the retention of effective control by the person who engages him. All this may be readily acknowledged, but the common law has been sufficiently flexible to adapt to changing social conditions by shifting the emphasis in the control test from the actual exercise of control to the right to exercise it, "so far as there is scope for it", even if it be "only in incidental or collateral matters" (Zuijs v. Wirth Brothers Pty Ltd, at p 571). Furthermore, control is not now regarded as the only relevant factor. Rather it is the totality of the relationship between the parties which must be considered. 
67. In the same case, Wilson and Dawson JJ said:
The classic test for determining whether the relationship of master and servant exists has been one of control, the answer depending upon whether the engagement subjects the person engaged to the command of the person engaging him, not only as to what he shall do in the course of his employment but as to how he shall do it: Performing Right Society, Ld. v. Mitchell and Booker (Palais de Danse), Ld. (1924) 1 KB 762. The modern approach is, however, to have regard to a variety of criteria. This approach is not without its difficulties because not all of the accepted criteria provide a relevant test in all circumstances and none is conclusive. Moreover, the relationship itself remains largely undefined as a legal concept except in terms of the various criteria, the relevance of which may vary according to the circumstances. Thus when Windeyer J in Marshall v Whittaker's Building Supply Co (1963) 109 CLR 210, at p 217, said that the distinction between a servant and an independent contractor "is rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own", he was really posing the ultimate question in a different way rather than offering a definition which could be applied for the purpose of providing an answer. So too when Denning LJ in Bank voor Handel en Scheepvaart N.V. v. Slatford (1953) 1 QB 248, at p 295, observed that the test of being a servant does not rest nowadays on submission to orders but "depends on whether the person is part and parcel of the organization". As a restatement of the problem, this observation may place a different emphasis upon the tests to be applied but of itself offers no new test for the solution of the problem ...
The other indicia of the nature of the relationship have been variously stated and have been added to from time to time. Those suggesting a contract of service rather than a contract for services include the right to have a particular person do the work, the right to suspend or dismiss the person engaged, the right to the exclusive services of the person engaged and the right to dictate the place of work, hours of work and the like. Those which indicate a contract for services include work involving a profession, trade or distinct calling on the part of the person engaged, the provision by him of his own place of work or of his own equipment, the creation by him of goodwill or saleable assets in the course of his work, the payment by him from his remuneration of business expenses of any significant proportion and the payment to him of remuneration without deduction for income tax. None of these leads to any necessary inference, however, and the actual terms and terminology of the contract will always be of considerable importance.
Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance.
68. Wilson and Dawson JJ made it plain (as did Mason J at 26) that the so-called "organisation test" - whether the worker is part and parcel of the organisation which engages him or her - is not a determinative test in itself, but a factor to be taken into account with other relevant considerations. Nevertheless, given my analysis of the nature of ATL's business as revealed below, I consider it to be a significant factor in this case.
69. ATL is essentially an organisation that provides interpreting and translating services to anyone who requires them and is prepared to pay for them. It provides those services in two broad ways. The first is by the use of its two full-time interpreter/translator employees, but of course they can only cover a small number of the languages in respect of which engagements might be brought to ATL by its clients. The second way in which ATL services its clients is to allocate the client engagements to its panel interpreters and translators.
70. I find that ATL could not operate its business in any reasonably efficient way in the absence of the panel members. It is important to note that what those panel members provide to ATL is not just an input to the service that ATL eventually provides to its clients; it is the entire service, the sum total of what the client engaged ATL to provide.
71. It is true that the panel members are free to engage in business on their own account, and it is likely that many of them do just that. It is also at least possible that many of them have arrangements of one sort or another with ATL's various competitors, either on similar terms to those with ATL or on an entirely different basis. However, the question is not whether the panel members engage in business when they are not undertaking an ATL assignment, but whether they are employees of ATL when they are.
72. The panel members undertake an interpreting assignment in exactly the same way that one of ATL's full-time interpreters would. They attend the agreed location at the agreed time. They then bring to bear their knowledge, skills and experience to render into English the words spoken in a foreign language, and vice versa. To that extent their performance of the assignment is not controlled by ATL, but that is the case also with the full-time employed interpreters. Where the level of control differs between the panel members and the full-time employees is that the former are expected to work only during pre-negotiated working hours, while the latter are expected to remain at work, at ATL's direction, for the duration of the standard working day. But that is exactly the type of distinction that one would expect to see between a full-time employee and a casual employee. It does not of itself indicate that one category of worker is employed, while the other is engaged as an independent contractor.
73. Counsel for ATL in his submission before the Tribunal approached this part of the enquiry in a different way. Instead of comparing the position of the panel interpreters with that of the full-time employed interpreters, he invited a comparison with:
a totally independent interpreter engaged on a one-off occasion, and then look at those elements that would, in all probability, if not commercial necessity, be the subject of terms, expressed or implied, between the two parties, and consider to what extent the terms expressed or implied ... - which of the terms of the Sani contract go beyond, in a control sense, that which would be incorporated in a purely independent contract.
74. His ultimate submission was that much of the "control" exercised over Mr Sani (or, by extension, any other panel interpreter) by ATL was simply in respect of administrative arrangements for the efficient conduct of the dealings between the two parties, and that the position was as it would have been with the hypothetical "totally independent interpreter engaged on a one-off occasion". He gave as examples the requirement to report to ATL after undertaking the assignment, the calculation of the fee, the payment of the fee, and the question whether the interpreter might suffer a financial penalty for failure to complete the assignment satisfactorily. This did not, he submitted, amount to control in a real sense.
75. ATL's written submissions focused on the factors taken into account by the majority in Hollis v Vabu Pty Ltd (2001) 207 CLR 21, a case dealing with the question whether Vabu, the operator of a bicycle courier business, was liable for the injury caused to Mr Hollis, a pedestrian, by the negligent act of one of the couriers. The majority, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ, decided that Vabu was liable because:
... consideration of the nature of [the couriers'] engagement, as evidenced by the documents to which reference has been made and the work practices imposed by Vabu, indicates they were employees.
76. Their Honours referred to the following seven factors:
- The couriers were not providing skilled labour or labour which required special qualifications;
- The couriers had little control over the manner of performing their work;
- The couriers, required as they were to wear Vabu's "livery", were presented to the public as emanations of Vabu;
- The danger to pedestrians was well known; Vabu should be vicariously liable as a matter of deterrence;
- Vabu superintended the couriers' finances and prohibited annual leave for certain busy periods of the year;
- The couriers provided their own tools and equipment; and
- As a corollary to (b), there was not only the right to exercise control in incidental or collateral matters, but rather, there was considerable scope for the actual exercise of control.
77. As to the impact of each of those factors on the circumstances of Mr Sani and the other panel members, ATL's written submissions were to the following effect:
- The panel members were providing skilled services which required qualifications and NAATI accreditation;
- There were no relevant controls over the panel members' performance of their assignments, apart from complying with industry norms such as the Code of Ethics, and with minor administrative obligations;
- They were not presented to the public or to ATL's clients as "emanations" of ATL. The business cards they presented merely "served the purposes of identification by name, establishing qualification for the task, accreditation and the fact that they were engaged by ATL";
- The question of deterrence did not arise here;
- Superintendence of finances is a weak factor, and in any event, here it was limited to ensuring satisfactory performance before payment. As far as leave was concerned, of course there was no leave entitlement for panel members, and they could work if and when they chose, assuming assignments were available;
- The tools and equipment point was not relevant to ATL; and
- The scope for actual control by ATL over the panel members was minimal; the terms of engagement control mechanisms were limited to administrative functions; the ethical requirements were universal for the industry.
78. The Commissioner's written submissions also dealt with each of those factors in turn:
- Although the panel members were providing skilled services, they were not in a position to generate their own personal 'goodwill' whilst undertaking assignments from ATL;
- Relevant control was exercised by ATL over the manner in which an assignment was undertaken, rather than over the manner of performing the interpreters' work - for example the interpreters' power to delegate once they accepted an assignment;
- The requirement to carry business cards issued by ATL as well as the restriction on soliciting clients whilst attending an ATL assignment effectively meant that when an interpreter attends an ATL assignment, "he/she is regarded as representing [ATL]";
- Complaints went first to ATL, not to the interpreters, because performance of each assignment affected ATL's goodwill - this is within the rationale of the deterrence factor referred to in Hollis;
- ATL superintended finances for the purpose of issuing invoices and calculating the interpreters' remuneration amounts. Absence of leave entitlements is frequently observed in a modern context of casual employment;
- Provision of equipment is not a decisive factor in all cases, and certainly not in this case;
- It has been acknowledged by the courts that the emphasis in the control test has shifted to the right to exercise control and not so much actual exercise of control; what is involved in ATL's powers of control is far more than Mr Sani simply accepting a degree of control and supervision necessary for the conduct of his own business - whenever he was engaged on ATL's behalf, Mr Sani was subject to a comprehensive scheme of control which was applied for ATL's benefit and for ATL's business.
79. The fact that in each case the Commissioner was able to place a different emphasis on the facts of the case indicates the extent to which the resolution of this issue comes down to a question of fact and degree, and even perhaps one of impression.
80. Having considered the totality of the relationship between the panel members and ATL, I have formed the view that in addition to the "organisation test" dealt with in - of these Reasons, there are two elements of the relationship which tip the balance in favour of a finding of an employee-employer relationship.
81. One of those elements is control. Even accepting that a panel member is free to accept or decline any assignment that ATL offers, it is clear that, once the offer is accepted, the panel member is subject to the control of ATL. It may be accepted, as ATL submits, that some of the control is imposed by industry norms, including the Code of Ethics, but it should be noted that compliance with the Code is expressly incorporated into ATL's Terms of Engagement of a panel member by clause 1 of the standard agreement. It is also true that some elements of the "control" would be no more than would be imposed on an independent contractor, such as punctual attendance, compliance with any special requirements of the client, standards of dress and courtesy. But an independent contractor would not normally be required to report the details of an assignment to its principal within 24 hours of conducting it. The arrangement suggests that ATL uses this requirement as a means of monitoring the services that ATL, through its employee-like panel members, has provided to its clients, rather than the services that the panel members have provided as independent contractors to ATL.
82. On the other hand, I see the fact that the panel members have little or no say in the setting of the fees as a neutral factor, indicative of nothing more than the power imbalance between ATL and the workers. It is not unusual for an independent contractor to submit to a fee structure imposed by its customer - the trade-off being admission to a panel of service providers, on the basis that some fee is better than none.
83. The final significant element tending towards an employment relationship - and in a sense it is a subset of control - is the relative lack of freedom granted to the panel members. I have found, as described in paragraphs - of these Reasons, that they lacked a general power of delegation, and that is a factor that has been found significant in other cases - as acknowledged by Mason J in Stevens v Brodribb (1986) 160 CLR 16 at 26. An independent contractor is free, once he has agreed to provide specified services to his customer, to provide those services in any way he wishes, including by providing them through his delegate or employee. That freedom was not available to the panel members. At best, if a panel member became unavailable to perform the agreed assignment, then he or she could suggest an alternative to undertake it, but the assignment would be awarded to the suggested alternative only if ATL agreed. And if ATL did agree, then it was ATL - and not the original panel member - who allocated the work to the alternative.
84. There is one other matter that I should deal with, in light of the emphasis placed on it by ATL. That is the contention that the panel members were paid to produce a "result", which is said to be inconsistent with the existence of an employment relationship.
85. ATL's contention was that the panel member's entitlement to payment "was only for each assignment completed". The Commissioner, however, submitted:
The evidence shows that this is not the basis of Mr Sani's engagement at all. Mr Sani was not paid for a result but rather he was engaged to render interpretation/translation services, which involved an expenditure of his effort and time, and it was for that he was paid.
86. I find that the Commissioner's characterisation is correct. Although the argument that a panel member is paid for a "result" is superficially appealing, it does not withstand scrutiny. The payment arrangements demonstrate that the panel members are not paid for a completed assignment, as such, although sometimes that is how it appears. Rather, they are paid for their time. Indeed, sometimes there is no result at all. For example, when a doctor or lawyer client is delayed with a prior appointment and the interpreting assignment has to be postponed, there is nothing to show for the time that the interpreter has made available and yet he or she will be paid in full for the allocated time. Similarly, if the assignment is incomplete at the end of the allocated time, it is not apt to describe what the interpreter has done - and for which he or she is entitled to full payment - as the production of a "result".
87. It follows from this analysis that there existed between ATL and Mr Sani a common law employment relationship. It is unnecessary to consider whether Mr Sani was also to be regarded as an "employee" within the extended definition in s 12(3) of the SGA Act.
88. The objection decision under review must be affirmed.