Unique Vespa Couriers Pty Ltd ('UVC') is a courier company operating in the Melbourne metropolitan area. Where most courier companies used bicycle couriers, UVC used vespas. They were the only company in Melbourne that did this. The Managing Director, Patrick Gaddo, had lived in Europe where vespas were quite common. The vespa was the perfect vehicle for a courier, as it was a cross between a motorbike and a bicycle. Statistics showed that vespas could go faster. Furthermore couriers did not need to be fit and be particularly skilled as was required for bicycle couriers.
UVC commenced business in Melbourne in 1998 and has grown steadily since then. It has 4 full-time employees. Generally there are also 20-25 independent contractors who are engaged as couriers and ride the vespas. The number of contractors engaged depends on how busy UVC are.
The couriers do not have a formal written contract. However the arrangements were set out in the Company's policy manual called 'Working with our couriers'. The specific arrangements were as follows-
- Each courier is to buy their own "unique vespa" from the company at a cost of approximately $6,000;
- The couriers are to maintain and repair the vespas at their own cost. However they must only use the authorised company repairer;
- Each courier gets a weekly allowance for petrol;
- Insurance is to be paid by the couriers, but the insurance must be obtained from the authorised company insurer;
- Each courier, whilst doing deliveries, must wear the authorised company uniform with the Unique Vespa company logo on it;
- Each courier is to report into the main office at 8.00am each morning and must report back at 3.00pm each day;
- Each courier must accept work allocated to them;
- The couriers are paid according to the number of deliveries made;
- No income tax is taken out and the couriers are responsible for their own tax obligations;
- No superannuation is paid to the couriers and they are not entitled to annual leave or sick leave;
- Each courier is not allowed to take their own leave without authorised permission from UVC;
- UVC manages the couriers' financial records by providing pay summaries each week.
Each of the couriers was asked to read the manual. A few copies of the manual were left in the staff room each day.
The company manual was not very long and only contained two chapters. The first chapter outlined the arrangements noted above and was titled 'couriers rights and obligations'. The second chapter was titled the 'company's values and beliefs'. The chapter was made up of aspirational statements relating to the company's vision for a 'green and sustainable workplace environment' and 'occupational health and safety values' (OHS). One of the statements in the OHS section stated the following-
'We are committed to the health and well-being of our staff and will do our best to provide a safe workplace,'
One of the couriers, Katrina Watt (nicknamed hurricane Katrina because she was known to get around Melbourne very fast while doing her deliveries), was asked by the supervisor to make a late delivery on a Saturday afternoon. Katrina had a date that night with a guy she had liked for 6 months and she needed to get home to get herself ready. The supervisor insisted she make the delivery and did not allow her to get a word in so she could explain her reasons for refusing to make the delivery. He then threatened her that she would not be getting anymore work from UVC and that her contract stipulated that she must accept all work allocated to her. Katrina still refused to do the delivery. The supervisor then yelled at her in the UVC office in front of all the staff. He told her to change out of her uniform and not come back.
Katrina started crying and then the supervisor grabbed Katrina by the arm and told her to leave the premises immediately. Katrina noticed a bruise on her arm the next day from the supervisor's handling of her. Katrina received a call from the supervisor on Monday morning telling her that she would not need to come in, as no more work would be allocated to her. Katrina was very upset as she had worked for the company exclusively since it started in 1998. She has lost confidence in herself and has been seeing a counsellor since the incident.
Larry Armitage had been working for UVC since 1998 as well. He is fascinated by how vespas are made. He has learnt a lot about the machinery of vespas generally from his own research and by working with UVC. He first started working with UVC as a courier but they saw his skills elsewhere and quickly employed him as the authorised repairer. He was given a standard employment contract. As part of his employment he was also involved in research projects relating to the improvement of the vespa. He however did not have fixed hours, working both at home and at the UVC repair centre. He was involved in a variety of projects at any given time.
Larry started creating his own technology and worked out a way that the vespa could run on electricity and not fuel. He got the idea as an on going project at UVC was to make the vespa more fuel efficient. However UVC never looked seriously at the idea of an alternative energy resource such as electricity. They spoke about this at meetings but it never became a formal project. Larry gave notice and left his job at UVC. He then engaged a patent attorney and patented the invention. He is now engaged in discussions with a United States company for the licensing of the rights. He is expected to make millions. UVC heard about this as the vespa industry is small they quickly sought an injunction to stop Larry and claim ownership of the intellectual property.
Soon after these events occurred UVC's Managing Director Patrick Gaddo was on the front page of the Age. He had been charged and pleaded guilty to 35 counts of laundering money and drugs throughout Melbourne. The Age reported that the money and drugs were being delivered by the couriers. Katrina has not been able to find work for six months. She believes it is because of her association with U VC and the criminal activities of the managing director.
The questions below assume that the couriers are employees on common law contracts.
1. Has Katrina, Larry and UVC breached any terms of the contract of employment?
2. Can UVC claim that they own Larry's invention and stop Larry from entering into a contract with the United States company.