Business Owners and WorkCover Compensation
Published on August 9, 2022
If someone manages their own business and sustains an injury, depending on the circumstances, that business owner could be entitled to WorkCover compensation.
Allen Kakos v Victorian WorkCover Authority
In a recent ruling in the Magistrates’ Court of Victoria, Allen Kakos v Victorian WorkCover Authority the plaintiff, Mr Kakos, was successful in establishing he was a ‘worker’ for the purposes of entitlements to compensation pursuant to the Victorian WorkCover legislation, Accident Compensation Act 1985.
The Magistrates’ Court considered whether Mr Kakos was a ‘worker’ in the period from 2005 to 2011 in circumstances where he and his brother ran their own business, collecting shopping trolleys at retail centres in Melbourne. Mr Kakos and his brother established the business in 2005, with Mr Kakos and his brother both being directors of a registered company. ‘KTS’.
The Magistrates’ Court heard evidence about KTS employing staff and that in the relevant period, Mr Kakos worked 10-12 hours per day, training, instructing and overseeing staff as well as checking safety rules and quality of the work being performed. Mr Kakos gave evidence concerning how he was paid including that he received and declared distributions from the Family Trust and not wages. Mr Kakos gave evidence that the distributions were for his share of the work.
The defendant argued that given the trust distributions being received by Mr Kakos was indicative of the nature of the agreement between him and his brother, that Mr Kakos was working under a contract of service and not under a contract for service. The defendant also contended that the trust distributions received by Mr Kakos and declared in his income tax returns were identical amounts to trust distributions and declared in income tax returns by his own wife. Further, Mr Kakos had not received superannuation and no income tax had been deducted, which was contrary to someone who had been engaged as a ‘genuine’ employee.
The Magistrates’ Court determined that Mr Kakos was performing work as a worker or employee and had a dual role with KTS on the following basis:
- His duties in the relevant period related to managing staff from day to day and working alongside them as he had performed trolley collection work in this period of time.
- The claim forms lodged by Mr Kakos cited that he was a driver and that his manual work had included collecting and pushing trolleys.
- Mr Kakos’ work was required by and for the benefit of KTS.
- The benefit derived by KTS was evident in trust tax returns of KTS which declared business income in the relevant period.
- Mr Kakos was performing a dual role and held dual functions. Reference was had to the case of Alobaidi v Z’N M TPT Pty Ltd which considered that this idea was ‘well settled’.
Whether an injured business owner will be entitled to WorkCover compensation will be dependant on the facts in each and every case.
If you are a business owner and have been injured, Carroll & O’Dea Lawyers can assist you with all of your enquiries.