Antony Meagher v Byrnecut Offshore Pty Ltd

[2016] FWC 4426

[2016] FWC 4426

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Antony Meagher
v
Byrnecut Offshore Pty Ltd
(U2016/5721)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 7 JULY 2016

Application for relief from unfair dismissal – identity of employer – overseas corporation – not a national systems employer.

[1] On 29 March 2016 Mr Meagher lodged an unfair dismissal application pursuant to s.394 of the Fair Work Act 2009 (the FW Act). In this application Mr Meagher contended that he had been unfairly dismissed by Byrnecut Offshore Pty Ltd (BOPL). BOPL objected to the application on jurisdictional grounds, on the basis that it had not employed Mr Meagher, and that in any event, Mr Meagher was not covered by a modern award and was in receipt of a salary in excess of the high income threshold.

[2] These jurisdictional issues were the subject of a hearing in Perth on 20 June 2016. In this hearing Mr Meagher was represented by Mr Cole of counsel, pursuant to a grant of permission made under s.596(2)(a) of the FW Act. That permission was granted because I was satisfied that the jurisdictional objection raised issues of some complexity. BOPL was represented by its in-house counsel, Ms O’Donovan.

[3] The jurisdictional issues can be relatively simply summarised. Mr Meagher worked from November 2014 to March 2016. The identity of his employer is a key matter in dispute. He worked as a miner in the Democratic Republic of the Congo (the DRC) in Africa on a fly in fly out (FIFO) basis. He agrees that he signed two employment contracts with Byrnecut Underground Congo SARL (BUCS), but asserts that he was recruited in Australia by BOPL and was paid by BOPL. Additionally, he asserts that BOPL should be regarded as his employer because of the corporate relationships which it has with BUCS. Mr Meagher asserts that his employment with BOPL was covered by the Mining Industry Award 2010.

[4] BOPL asserts that Mr Meagher was employed by BUCS and that BOPL simply undertook a range of human resource management and administrative functions in Australia in its role as supporting BUCS. BOPL agreed that it was involved in recruiting Mr Meagher and that it paid him but it advised that it was reimbursed for the costs of those activities by BUCS. BOPL advised that BUCS paid all the taxes related to Mr Meagher’s employment in the DRC. BOPL asserted that the practical reality of the relationship between Mr Meagher and BUCS was that of an employee and employer. BOPL asserts that it is part of the Byrnecut group of companies and that there are some 35 separate companies in this group. These are generally associated entities within the meaning of s.50AAA of the Corporations Act but that BUCS operated as a separate legal entity, with substantial assets and liabilities. BUCS is incorporated in the DRC and is involved in the business of contract underground mining specifically within that country.

[5] There is no dispute that Mr Meagher was paid a salary in excess of $200,000 per year so that, unless he was covered by a modern award, he was not a person protected from unfair dismissal as this salary is well above the high income threshold. Mr Meagher asserts that, as he was employed by BOPL, his employment was covered by the Mining Industry Award 2010. The BOPL position is that this award cannot have application to him as an employee working for BUCS in the DRC.

[6] Mr Evers is employed as the Finance Director of Byrnecut Australia Pty Ltd (BAPL). As well as being a Director of BOPL, Mr Evers is a Director of BUCS, and a number of other companies within what is described as the Byrnecut Group. Mr Evers’ evidence went to confirm the corporate governance arrangements applicable to the various companies within the Byrnecut Group. Critical to this corporate governance arrangement was the predominant ownership arrangement of the various companies by Byrnecut Mining International Limited, a company incorporated in the British Virgin Islands. He explained that, in accordance with normal practices, within the Byrnecut Group, BUCS was incorporated in 2012 for a tender for the Kubali goldmine in the DRC. BUCS subsequently won that work and entered into a contract which was registered in the DRC according to the laws applicable in that country. BUCS was managed by a Project Manager and had assets in the order of $50 million US and a gross annual revenue in the order of $100 million US. He advised that BUCS had no Australian bank account and that it was taxed according to the laws of the DRC. This extended to payments made with respect to the DRC equivalent of payroll tax for Mr Meagher. Mr Evers’ evidence went to confirm that BOPL undertook various personnel management and other functions for BUCS and that it was reimbursed by BUCS for those functions on a monthly basis.

[7] Mr Evers provided documentation which demonstrated that Mr Meagher had identified himself to BUCS as a candidate for employment with BUCS and that BUCS had requested BOPL to undertake pre-employment checks. This information confirmed that the actions taken by BOPL were at the instructions of the BUCS Project Manager. BOPL then forwarded to Mr Meagher an example of the employment terms and conditions for employment with BUCS. 1 Arrangements for Mr Meagher to fly to Africa were made by BOPL consistent with instructions from BUCS. Mr Meagher signed a contract of employment with BUCS on 17 November 2014.2 On this same day he also signed other documents relative to employment in the DRC. Some time after he arrived in the DRC Mr Meagher signed a further employment contract3 which was registered with the appropriate authorities in the DRC.

[8] Mr Evers’ evidence went to payment arrangements made by BOPL at the request of BUCS and the commercial arrangement between BOPL and BUCS in this respect. His evidence also confirmed the taxation payments made and recorded with respect to Mr Meagher’s employment in the DRC.

[9] Mr Meagher’s evidence confirmed that he had expressed interest in employment to the BUCS Project Manager and had subsequently dealt with BOPL personnel in Australia. He understood that he had been employed by BOPL notwithstanding documentation which identified the employer as BUCS. Mr Meagher confirmed that BOPL arranged his travel and paid him. Mr Meagher recalled signing various employment documents in Perth before he left for the DRC and agreed that he had signed a further employment agreement in the DRC. Mr Meagher acknowledged that he had declared his overseas income to the Australian Taxation Office and that this declaration had specified BUCS as his employer.

Findings

[10] Mr Meagher’s unfair dismissal application is made pursuant to Part 3-2 of the FW Act. This Part refers to employees as national system employees and employers as national system employers. 4 Section 14 of the FW Act defines a national system employer in the following relevant terms:

“14 Meaning of national system employer

(1) A national system employer is:

(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or

(b) the Commonwealth, so far as it employs, or usually employs, an individual; or

(c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or

(d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:

(i) a flight crew officer; or

(ii) a maritime employee; or

(iii) a waterside worker; or

(e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or

(f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory.

Note 1: In this context, Australia includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands (see paragraph 17(a) of the Acts Interpretation Act 1901).

Note 2: Sections 30D and 30N extend the meaning of national system employer in relation to a referring State.”

[11] A constitutional corporation is defined in the following terms:

“constitutional corporation means a corporation to which paragraph 51(xx) of the Constitution applies.” 5

[12] Section 51(xx) of the Commonwealth of Australia Constitutions Act states:

“The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:

…

(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth;”

[13] A national system employee is defined in complementary terms in s.13 of the FW Act:

“13 Meaning of national system employee

A national system employee is an individual so far as he or she is employed, or usually employed, as described in the definition of national system employer in section 14, by a national system employer, except on a vocational placement.

Note: Sections 30C and 30M extend the meaning of national system employee in relation to a referring State.”

[14] Consequently, Mr Meagher can only access Part 3-2 of the FW Act if he was employed by BOPL or, in the event that he was employed by BUCS, if BUCS can be regarded as a national system employer.

[15] I have concluded that Mr Meagher was employed by BUCS. He sought employment with BUCS. He signed employment contracts with BUCS. He took employment directions from BUCS and was ultimately dismissed by BUCS. He described BUCS as his employer for Australian taxation purposes. BUCS paid taxes in the DRC with respect to Mr Meagher. Mr Meagher was managed by BUCS and was dismissed by BUCS. He signed an employment contract with BUCS, 6 which amongst other detailed provisions, provided that:

“2.1 The Company carries on business in Democratic Republic of Congo (Country) in contract underground mining for Kilbali Goldmines SPRL (Client) at the Mine. The Company will employ the Employee in the Position at the Mine (Employment). The terms and conditions of this Agreement shall apply from the Commencement Date and the Employment will commence on the Commencement Date.”

…

“4.9 The Company employs an international workforce including staff from countries with very different economic circumstances. The Company is concerned to maintain harmonious relations with all staff. For that reason, the Employee must not disclose and must take all reasonable steps to prevent disclosure of details of the Annual Salary and other terms of this Agreement to any employee, subcontractor or any other person involved in the business of the Company.”

…

“30.1 The effect, interpretation and execution of this Agreement shall be bound and protected by the law of the Country. The Parties hereby submit to the sole jurisdiction of the courts of the Country.” 7

[16] The role played by BOPL in his recruitment and as the payment agency was undertaken on behalf of BUCS and cannot establish BOPL as the employer in these circumstances.

[17] I have then considered whether BOPL and BUCS should be regarded as a single entity which is a national system employer. The evidence before me establishes that there are a range of discrete entities which operate under the umbrella of the Byrnecut Group. The evidence does not establish a single, corporate body which is a national system employer. To the extent that there may be common ownership arrangements, this cannot be taken to extend the FW Act to a business which operates and is established under the laws of another country. Division 3 of Part 1-3 of the FW Act confirms the inherent constitutional limitations of the application of this legislation. Mr Meagher was engaged by an overseas business to work overseas and cannot be regarded as an Australian based employee of an Australian employer.

[18] Having concluded that Mr Meagher was an employee of BUCS, I have then concluded that company is not a national system employer. BUCS is not a corporation formed within the limits of the Commonwealth of Australia. The fact that one or more of the companies within the Byrnecut Group is a constitutional corporation does not mean that other entities, formed in, and operating in other countries, can be regarded as constitutional corporations for the purposes of the FW Act.

[19] It follows that Mr Meagher was not a national system employee and hence the unfair dismissal provisions in Part 3-2 of the FW Act must be applied so that Mr Meagher was not a person protected from unfair dismissal. I add that, in any event, I am not satisfied that the Mining Industry Award 2010 could have any application to Mr Meagher and that it is clear that his income exceeded the high income threshold so that he could not be regarded as a person protected from unfair dismissal. Mr Meagher’s application must be dismissed for the reasons I have set out above. An Order (PR582376) consistent with this decision will be issued.

Appearances:

C Cole counsel for the applicant.

G O’Donovan for the respondent.

Hearing details:

2016.

Perth:

June 20.

 1   Exhibit B1, Attachment RDE6

 2   Exhibit B1, Attachment RDE12

 3   Exhibit B1, Attachment RDE21

 4   see s.380

 5   Fair Work Act 2009, Section 12

 6   Exhibit B1, Attachment RDE12

 7   Exhibit B1, Attachment RDE12, clauses 2.1, 4.9, 30

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<Price code C, PR582375>