Amirbeaggi v Parramatta Eye Centre Pty Ltd

[2017] FCCA 1915

FEDERAL CIRCUIT COURT OF AUSTRALIA

AMIRBEAGGI v PARRAMATTA EYE CENTRE PTY LTD & ANOR [2017] FCCA 1915

Catchwords:
PRACTICE & PROCEDURE – Strike out application – whether pleading of unfair dismissal should be struck out.

INDUSTRIAL LAW – Whether this court has jurisdiction to determine a claim for unfair dismissal under the Fair Work Act 2009 (Cth) – whether the court would be exercising judicial power or arbitral power – whether the court has associated jurisdiction to determine a claim for unfair dismissal under the Fair Work Act 2009 (Cth) – whether a claim for unfair dismissal under the Fair Work Act 2009 (Cth) is a civil claim – whether the unfair dismissal jurisdiction of the Fair Work Act 2009 (Cth) creates rights – whether the contravention of an order for reinstatement or compensation for unfair dismissal under section 390 of the Fair Work Act 2009 (Cth) is justiciable – application dismissed.

Legislation:
Commonwealth of Australia Constitution Act 1900 (Cth)
Competition and Consumer Act2010 (Cth) – Sch.2, ss.31, 236, 18
Fair Work Act2009 (Cth), ss.323, 389, 119, 90, 385, 394, 379, 390, 539, 405, 566, 567, 545

Cases Cited:
Re: Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union (1987) 163 CLR 656
Welsh v Allblend Holdings Pty Ltd (No.2) [2010] FMCA 377
R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254

Applicant: SHIRIN AMIRBEAGGI

First Respondent: PARRAMATTA EYE CENTRE PTY LTD

Second Respondent: DEAN POWRIE

File Number: SYG 1591 of 2017

Judgment of: Judge Emmett

Hearing date: 17 JULY 2017

Date of Last Submission: 31 JULY 2017

Delivered at: Sydney

Delivered on: 17 AUGUST 2017

REPRESENTATION

Counsel for the Applicant: Mr Andrew Fernon

Solicitors for the Applicant: O’Neill McDonald Lawyers

Counsel for the Respondents: Mr Bryce Cross

Solicitors for the Respondents: Kennedys (Australasia) Pty Ltd

FEDERAL CIRCUIT
COURT OF AUSTRALIA AT
SYDNEY

SYG 1591 of 2016

SHIRIN AMIRBEAGGI

Applicant

And

PARRAMATTA EYE CENTRE PTY LTD ACN 109 045 418

First Respondent

DEAN POWRIE

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an Application in a Case, filed by the respondents on 5 June 2017, seeking that paragraphs 27, 28 and 29(c) of the Further Amended Statement of Claim, filed on 24 April 2017, be struck out on the basis that the court has no power to determine a claim for unfair dismissal, and that the Fair Work Commission has exclusive jurisdiction in relation to a claim for unfair dismissal. Those paragraphs are as follows:

   “27.There was no valid reason to dismiss the Applicant, and the dismissal is not justifiable.

   28. In the premises, the Applicant’s dismissal was harsh, unjust and unreasonable and constitutes ab “unfair dismissal” within the meaning of section 285 of the Act, such that the Applicant is entitled to compensation for loss and damages to the equivalent of 16 weeks of the Applicant’s base annual salary ($95,000), $29,230.77 and the Applicant seeks an order for payment of the said sum.

   29. The Applicant claims the following relief:

   c. Damages in the sum of $29,230.77 in respect of the unfair dismissal claim.”

The pleadings

1. By Further Amended Statement of Claim filed on 24 April 2017, the applicant claims to have been employed by the first respondent as a business development manager on a full time basis from 1 July 2014 to 2 June 2016. The applicant pleads that her initial terms and conditions involved an annual base salary of $90,000, superannuation, a fully maintained company motor vehicle and an annual incentive bonus payment of a minimum of $20,000 if the applicant met performance targets. The applicant alleges that these terms of the employment agreement were agreed orally between the applicant and second respondent on or around 20 June 2014.

2. On or about 31 August 2015 the applicant was offered and accepted an offer of employment from Bayer Australia Limited (“Bayer”) as a full time territory manager to commence on 24 September 2015. The Bayer offer was on better terms than her employment with the first respondent.

3. The applicant pleads that in or around September 2015 the first respondent represented to the applicant that the first respondent would increase the applicant’s annual base salary to $95,000 and pay the applicant a $20,000 annual bonus incentive upon her meeting performance targets.

4. The applicant pleads that in reliance upon those representations, the applicant rejected the Bayer offer and remained employed by the first respondent until her dismissal on 2 June 2016.

5. The applicant pleads that the representations were untrue, inaccurate or misleading or deceptive because the applicant was not paid any of the further bonuses.

6. The applicant pleads that the first respondents conduct was in contravention of s.31 of the Australian Consumer Law 2010 (Cth) (“ACL”) comprising Schedule 2 of the Competition and Consumer Act2010 (Cth) and that the second respondent has accessorial liability for the contraventions of the first respondent.

7. The applicant claimed to have been entitled to a bonus payment of $20,000 on 1 July 2015 and a further pro-rata bonus payment of $18,333.33 up to her alleged dismissal. In addition the applicant claims a further $11,353 being the difference between the Bayer offer and her employment terms with the first respondent.

8. The applicant also claims damages for alleged breach of contract in failing to pay bonuses in the sum of $38,333.33.

9. Further, the applicant pleads that the second respondent failed to ensure that the first responded paid the bonus entitlements to the applicant and was the person involved in the first respondent’s contravention of s.323 of the Fair Work Act2009 (Cth) (“FWA”).

10. The applicant claimed that on 2 June 2016 she was dismissed from her employment with the first respondent by the second respondent in an oral meeting.

11. The applicant alleges that the first respondent failed to consult with the applicant prior to her being made redundant, and, on 10 June 2016 gave a written notice of redundancy to the applicant.

12. The applicant alleges the redundancy is not a genuine redundancy as defined in s.389 of the FWA and that she has not received any payment in respect of either a redundancy or her entitlements to reasonable notice under her contract pursuant to ss.119 and 90(2) of the FWA respectively.

13. The applicant pleads that her dismissal was unfair within the meaning of s.385 of the FWA and that she’s entitled to compensation for loss and damage to the equivalent of 16 weeks of the applicant’s base annual salary.

14. The applicant seeks orders pursuant to s.236(1) of the ACL for damages as well as damages in the sum of $29,230.77 in respect of the unfair dismissal claim.

15. Alternatively the applicant claims redundancy pay pursuant to s.119 of the FWA and pay in lieu of annual leave pursuant to s.90(2) of the FWA. The applicant also seeks $38,333.33 in annual bonus payments.

16. By its defence, filed on 7 June 2017, the respondents contend that any proposed bonus negotiation revolved around certain key performance indicators, which were never received from the applicant, and that the specific terms of a bonus incentive scheme during the applicant’s employment was never agreed to.

17. The respondents denied the allegations of engaging in misleading and deceptive conduct in contravention of s.18 and or s.31 of the ACL and deny that the applicant is entitlement to any bonus payment. The respondents also deny the applicant’s claim for breach of contract to pay the applicant the alleged unpaid bonus payments of $38,333.33. The respondents also deny any breach of s.323 of the FWA.

18. The respondents contend that the applicant was informed orally on 2 June 2016 that her role was being made redundant, that the redundancy was genuine.

19. The respondents also contend that the applicant has been paid all entitlements due to her, being four weeks pay as redundancy pay made on 14 June 2016 and four weeks pay in lieu of notice made on 28 September 2016. The respondents contend that the applicant had a negative annual leave balance as at the redundancy date and is not entitled to any payment under s.90 of the FWA.

20. Further, the respondents contend that given the redundancy was genuine, there is no unfair dismissal under s.385 of the FWA.

21. The respondents further contend that unfair dismissal proceedings are to be heard and determined by the Fair Work Commission (“FWC”) and not the Federal Circuit Court; that the applicant is now out of time to file an unfair dismissal application with the FWC pursuant to s.394(2)(a) of the FWA: and, that therefore this Court cannot hear this part of the applicant’s claim.

22. The paragraphs which the respondents seek to strike out in their Further Amended Statement of Claim are those that plead unfair dismissal against the respondents.

Unfair dismissal

1. Part 3-2 of the FWA deals with unfair dismissal.

2. Pursuant to s.379 of the FWA, Division 2 sets out when a person is protected from unfair dismissal; Division 3 sets out the elements that make up an unfair dismissal; Division 4 sets out the remedies the FWC can grant for unfair dismissal; and, Division 5 is about procedural aspects in relation to remedies for unfair dismissal.

3. Pursuant to s.390 of the FWA, the remedies that the FWC may order are reinstatement or the payment of compensation if the FWC is satisfied that the person was protected from unfair dismissal at the time of being dismissed and the person has been unfairly dismissed. Section 390 of the FWA states as follows:

   “(1) Subject to subsection (3), the FWC may order a person's reinstatement, or the payment of compensation to a person, if:

   (a) the FWC is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and

   (b)  the person has been unfairly dismissed (see Division 3).

   (2) The FWC may make the order only if the person has made an application under section 394.

(3)  The FWC must not order the payment of compensation to the person unless:

(a)  the FWC is satisfied that reinstatement of the person is inappropriate; and

(b) the FWC considers an order for payment of compensation is appropriate in all the circumstances of the case.”

(Emphasis added)

1. Pursuant to s.394 of the FWA a person who has been dismissed may apply to the FWC for an order under s.390 of the FWA. The application to the FWC must be made within 21 days after the dismissal took effect, or within such other period as the FWC may allow.

2. Nothing in the FWA prohibits an employer from engaging in unfair dismissal.

3. Section 539 of the FWA relates to applications for orders in relation to contraventions of civil remedy provisions.

4. Pursuant to s.394(1) of the FWA, a person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy either for an order for reinstatement or an order for compensation.

5. Section 405 of the FWA provides that a person to whom Part 3-2 applies must not contravene a term of the order.

6. Section 566 of the FWA confers jurisdiction on the Federal Circuit Court in relation to any civil matter arising under the FWA. Section 567 of the FWA states that the jurisdiction conferred on the Federal Circuit Court under s.566 of the FWA is to be exercised in the Fair Work Division of the Federal Circuit Court if:

   “ (a) an application is made to the Federal Circuit Court under this Act; or

   (b) an injunction is sought under section 15 of the Federal Circuit Court of Australia Act 1999 in relation to a matter arising under this Act; or

   (c) a declaration is sought under section 16 of the Federal Circuit Court of Australia Act 1999 in relation to a matter arising under this Act; or

   (d) proceedings in relation to a matter arising under this Act are transferred to the Federal Circuit Court from the Federal Court; or

   (e) the High Court remits a matter arising under this Act to the Federal Circuit Court.”

7. The applicant contends that a claim under Part 3-2 is a civil matter in the context used in the FWA.

8. However, a “civil matter” must be a justiciable matter involving the exercise of judicial power. The creation of a right, which is done by the FWC if it makes an order under Part 3-2 of the FWA, does not involve the exercise of judicial power (see Re: Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers’ Union (1987) 163 CLR 656 at [28]).

9. The exercise of judicial power involves breaches of the law, including civil penalty provisions and interpretation of awards and other industrial instruments. It does not include the creation of rights which is done by the legislature in Part 3-2 of the FWA in relation to unfair dismissal (see Welsh v Allblend Holdings Pty Ltd (No.2) 2010 FMCA 377 at [13] – [15] per Lucev FM).

10. It is beyond doubt that the FWC exercises arbitral power only in its determination of unfair dismissal proceedings. For it to do otherwise would be beyond its power. In R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254, the High Court of Australia made clear that the Commonwealth of Australia Constitution Act 1900 (Cth) (“the Constitution”) does not allow the conciliation and arbitration power of the Constitution to be exercised in combination with the judicial power of the Constitution.

11. It is only in the event that the FWC makes an order either for reinstatement or compensation that a potentially justiciable right may arise. That right arises if a person is subject to an order made by the FWC and that person fails to comply with that order

12. Section 405 of the FWA has the effect that a person in respect of whom an order for reinstatement or compensation has been made by the FWC under s.390 of the FWA, must not contravene a term of the order. The order is creating rights and entitlements, the breach of which is justiciable by a court, rather than the creation of those rights. The creation of those rights is clearly in the circumstances an exercise in arbitral power. 

13. In other words, by making an order for reinstatement or compensation as provided for under s.390 of the FWA, the FWC has created a right and that right can only be enforced by the Courts exercising judicial power.

14. The unfair dismissal jurisdiction of the FWA involves ascertaining whether rights and obligations that do not exist should be created by the FWC by the making of an order under s. 390 of the FWA.

15. In relation to the applicant’s claim that the Court has associated power to hear a claim for unfair dismissal, plainly where the power in relation to unfair dismissal claims is arbitral, the Court can have no such associated power.

16. Further, the applicant’s references to the claims made by the applicant in relation to ss.90(2), 119, 323, 545 of the FWA are irrelevant as they all involve pre-existing legal obligations.

Conclusion

1. In the circumstances, the orders sought in the respondents’ Application in a Case should be made.

2. Accordingly, paragraphs 27, 28 and 29(c) of the Further Amended Statement of Claim should be struck out with costs.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge Emmett

Date: 17 August 2017