Balding v Ten Talents Pty Ltd and Anor (No.3)
[2008] FMCA 255
•6 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BALDING v TEN TALENTS PTY LTD & ANOR (No.3) | [2008] FMCA 255 |
| INDUSTRIAL LAW – Australian Workplace Agreement – application of duress – form and terms of Australian Workplace Agreement not negotiable. |
| Workplace Relations Act 1996 (Cth), ss.400(5) & (6), 728(1) & (2) |
| Balding v Ten Talents Pty Ltd & Anor [2007] FMCA 145 Smith v Granada Tavern & Ors (No 2) [2007] FMCA 904 ASU v Electrix Pty Ltd (1999) 53 IR 43 Bishop v Ropolo Services Pty Ltd (2006) 153 FCR 357 Schanka v Employment National (2001) 112 FCR 101 |
| Applicant: | GAYLE NAOMI BALDING |
| First Respondent: | TEN TALENTS PTY LTD (ACN 121 450 333) |
| Second Respondent: | CYBERLINK PTY LTD (ACN 082 280 037) |
| File Number: | PEG 253 of 2006 |
| Judgment of: | Lucev FM |
| Hearing dates: | 12 & 13 March 2007 |
| Date of Last Submission: | 13 March 2007 |
| Delivered at: | Perth |
| Delivered on: | 6 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms G Archer |
| Solicitors for the Applicant: | Blake Dawson Waldron |
| Counsel for the First Respondent: | Mr S Ellis |
| Solicitors for the First Respondent: | Clayton Utz |
| Counsel for the Second Respondent: | Mr T Caspersz |
| Solicitors for the Second Respondent: | CCI Legal |
ORDERS
That the application as it relates to Michael Phillip King be dismissed.
DECLARATIONS
On or about 15 to 22 September 2006 the First Respondent and the Second Respondent contravened s.400(5) of the Workplace Relations Act, 1996 (Cth), by the application of duress to an employee, Debbie Lee Franklin, in connection with an AWA.
FURTHER ORDERS
That the hearing of the matter be adjourned to a directions hearing at 9:00 am on 17 March 2008 in relation to compensation and penalties.
Costs reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 253 of 2006
| GAYLE NAOMI BALDING |
Applicant
And
| TEN TALENTS PTY LTD (ACN 121 450 333) |
First Respondent
| CYBERLINK PTY LTD (ACN 082 280 037) |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The substantive application, filed on 9 October 2006, seeks the following orders on the basis set out therein:
“1.In accordance with sections 407(1)(b) and 407(2)(zi) of the Workplace Relations Act 1996 (the WR Act,) the Applicant seeks that pecuniary penalties be imposed on:
(a) the first respondent; and
(b) the second respondent.
And that those penalties be paid to the Commonwealth pursuant to s841 of the WR Act.
2.In accordance with s413 of the WR Act, the Court order that each respondent pay compensation of such amount as the Court consider appropriate for any loss or damage resulting from each contravention to which this Application relates suffered by the subject of each contravention, namely Ms Debbie Franklin and Mr Michael King respectively.
3.The Applicant seeks the above orders on the basis that each of the respondents:
(a) breached section 400(5) of the WR Act by applying duress to an employee, Ms Debbie Franklin in connection with an AWA or was involved in a contravention of s400(5) in relation to the employee within the meaning of s728 of the WR Act; and/or
(b) breached section 400(5) of the WR Act by applying duress to an employee, Mr Michael King in connection with an AWA or was involved in a contravention of s400(5) in relation to the employee within the meaning of s728 of the WR Act.”
Legislative Provisions
Section 400(5) and (6) of the Workplace Relations Act1996 (Cth) (“WR Act”) lies at the heart of the application in this case. Section 400(5) and (6) of the WR Act provides as follows:
“400 Coercion and duress
…
(5)A person must not apply duress to an employer or employee in connection with an AWA.
(6)To avoid doubt, a person does not apply duress for the purposes of subsection (5) merely because the person requires another person to make an AWA as a condition of engagement.”
Section 728 of the WR Act is also relevant and provides as follows:
“(1)A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
(2)For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.”
The Law
The law concerning duress was fully set out in Balding v Ten Talents Pty Ltd & Anor[1] as follows:-
[1] [2007] FMCA 145 (“Ten Talents”).
“33.Duress involves the illegitimate application of pressure likely and intended to have the effect of denying the exercise of a person’s free will, and in relation to the circumstances of this case, irrespective of whether an AWA is entered into or otherwise: Schanka v Employment National (Administration) Pty Ltd (1999) 166 ALR 663 at 680-681 per Moore J (“Schanka 1999”); [1999] FCA 1334 at paras 40-43; Maritime Union of Australia v Geraldton Port Authority (1999) 165 ALR 67 at 125 per Nicholson J; (“Geraldton Port Authority”) [1999] FCA 899 at para 367 per Nicholson J; Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 at 287-289 per Ryan J; [2002] FCA 349 at paras 38-43 per Ryan J (“Canturi”); Bishop v Ropolo Services Pty Ltd (2006) 153 FCR 357 at 361-362 per Madgwick J; [2006] FCA 592 at paras 17-21 per Madgwick J (“Bishop”).
34.Illegitimate pressure may include unlawful threats, unconscionable pressure, and, in relevant circumstances, lawful conduct: Geraldton Port Authority, ALR at 125 per Nicholson J; FCA at 367 per Nicholson J.
35.Illegitimate pressure does not exist merely because an offer of employment is contingent upon entry into an Australian Workplace Agreement (“AWA”): WR Act, s.400(6); Bishop, FCR at 362 per Madgwick J; FCA at para 22 per Madgwick J. Whether there is illegitimate pressure is a question of fact determinable in the circumstances of each particular case: Canturi, FCR at 289 per Ryan J; FCA at para 43 per Ryan J. Pressure is not enough: for pressure to amount to duress it must, during the process of offer and negotiation leading to acceptance or non acceptance of an AWA, cross the boundary from normal pressure exerted by a party in the process of offer and negotiation and enter the territory of illegitimate pressure. A range of factors have been identified by courts in determining whether a party has been subject to duress.
Duress – Consideration of factors
36.Employment in the same job has been identified as the single most important factor in relation to the application of illegitimate pressure in claims of this type: Schanka & Ors v Employment National (Administration) Pty Ltd (2001) 112 FCR 101 at 139 per Moore J; [2001] FCA 579 at para 102 per Moore J (“Schanka 2001”). There it was reasoned that employees have a reasonable expectation that positions with a new employer (in this case the First Respondent) entering (to use a neutral term) into an existing business will not be on terms and conditions materially inferior to those under their previous employment (in this case with Action, who are not a party to these proceedings), and that the employee’s “relative position in the market place was … threatened” if “they were threatened with loss of such existing expectations unless they entered into AWA’s”: Bishop, FCR at 363 per Madgwick J; FCA at para 26 per Madgwick J.
37.Conduct which puts an employee in the position of “it’s the AWA or your job” has been held to be unconscionable conduct giving rise to a serious issue to be tried as to whether it is duress in relation to the employees concerned (under the provisions of the former section 170WG (1) of the WR Act): Australian Services Union v Electrix Pty Ltd (1999) 53 IR 43 at 45 per Marshall J; [1999] FCA 211 at paras 15-16 per Marshall J (“Electrix”).”
…
40.A change of workplace might arguably constitute termination of an employment contract in certain circumstances: see Macken & Ors, The Law of Employment (5th ed) (Sydney: Law Book Company, 2002) pages 251-252; Webber, Batt’s The Law of Master and Servant (5th ed) (London: Pitman & Sons, 1967) page 116. It is arguable that the offer of AWA’s only might have effectively amounted to “its the AWA or your job”, both as a matter of law, and as matter of practicality.
…
42. On the present evidence neither Franklin nor King:
a)had the option of continuing on in their existing position at the Hilton Supermarket if they did not sign the AWA; and
b)were probably faced with a change in the location of their workplace.
These facts were not present in Bishop, a case heavily relied upon the Second Respondent. Bishop is distinguishable on that basis (at least as to the ultimate outcome). However, Bishop also supports the proposition that there may be duress in the conduct (particularly during the September 2006 interviews of Franklin and King) of the Second Respondent’s officers or representatives, because that conduct does threaten “the pre-existing status quo”: Bishop, FCR 371-372 per Madgwick J; FCA at para 64, by threatening to remove Franklin and King from their respective and specific positions at the Hilton Supermarket.
43.The Second Respondent argued that there was no evidence of duress, particularly because the pre-existing status quo was unchanged in that Franklin and King would still be employed and paid by Action. This approach is too simplistic, and contrary to authority which makes it clear that the focus is on any conduct which threatens the actual position in which the employee is employed, and the actual terms and conditions (including, for example, the location of the workplace) on which the employee is employed: Bishop, FCR 371-372 per Madgwick J; FCA at para.64;
…
46.Any prior relationship between the Second Respondent and Franklin and King (such as and including that arising from the process of offering AWA’s and conducting interviews in relation to those offers) may be significant, and may warrant examination of the circumstances of the conduct said to constitute duress: Maritime Union of Australia v Burnie Port Corporation Pty Ltd (2000) 101 IR 435 at 451 per Ryan J; [2000] FCA 1189 at para 71 per Ryan J (and see also para.72); Bishop, FCR at 362 per Madgwick J; FCA at para 23 per Madgwick J.
…
50.Actual, or threatened, reduction in employee entitlements, or opportunities which might be afforded an employee in their employment, might be a relevant factor in a consideration of duress: ALHMWU & Ors v Cranbourne RSL Sub-Branch Inc (1999) FCA 1425 at paras 33-34 per Ryan J (“Cranbourne RSL”). Although Cranbourne RSL dealt with existing employees being offered AWA’s by their existing employer, the principle with respect to a consideration of duress in the context of entitlement reduction is applicable in other circumstances where AWA’s are offered, including to the existing employees of a business being purchased by a new employer.
…
55.Another factor which must be considered is whether or not there was an opportunity to negotiate, either in relation to an alternative form of industrial instrument (other than an AWA) or to negotiate in a particular manner or form: Schanka 2001 FCR at 139-140 per Moore J; FCA at paras 104-105 per Moore J. There is evidence that Franklin and/or King:
a)wished to continue employment with the First Respondent on the terms of the Action Supermarkets Agreement;
b)considered that there was no opportunity to negotiate with the First Respondent (represented by officers of the Second Respondent); and
c)felt unable to negotiate alone, and unequal in bargaining ability.
56.Rightly or wrongly (and it is not presently necessary for the Court to determine which), there is a view that the employer-employee relationship entails a power […] disparity, or as it is often put, an inequality of bargaining power. It has long been thus. Blackstone considered the master-servant relationship to be one of status: William Blackstone, Commentaries on the Laws of England (1765) vol 1, pages 410-420. 245 years ago Lord Henley LC spoke of necessitous men not truly free (to exercise their will), but open to submission to any terms the crafty may impose: Vernon v Bethel (1762) 2 Eden 110 at 113. Modern Australian labour law academics and eminent legal writers have adverted to the inequality of employee bargaining power: Creighton & Stewart, Labour Law An Introduction (3rd ed) (Sydney: Federation Pres, 2000) pages 4-5; Macken, The Employment Revolution (Sydney: Federation Press, 1992) chapter 7; Ludeke, The Line in the Sand. The long road to staff employment in Comalco (Melbourne: Wilkinson Books, 1996) pages 1-2. That background simply reinforces the appropriateness of the consideration of power disparity as a possible factor in conduct allegedly causing duress.”[2]
[2] Ten Talents at paras 33-37, 40, 42-43, 46, 50 and 55-56 per Lucev FM. The description of duress at paras 33-35 of Ten Talents has subsequently been described as helpful: Smith v Granada Tavern & Ors (No 2) [2007] FMCA 904 at para 29 per Burchardt FM.
The Evidence
The background facts and affidavit evidence of the two employees concerned, Franklin and King was also set out at length in Ten Talents, as follows:-
“7.Debbie Lee Franklin (“Franklin”) and Michael Phillip King (”King”) were at all material times up to 25 and 22 September 2006 respectively, employees of Action Supermarkets Pty Ltd (“Action”) (sometimes referred to as “Metcash”) at the IGA Hilton Supermarket (“Hilton Supermarket”): Affidavit of Franklin, para 4; Affidavit of King, paras 6 and 7.
8.Action sold the Hilton Supermarket to the First Respondent. The Actual Completion Date for the sale is contained in the Agreement for Sale of Business – IGA Supermarket – 285 South Street, Hilton (“Sale Agreement”) extracts from which are in evidence: Affidavit of Jones, paras 10 and 11 and Exhibit AJ4, and 25 September 2006: Affidavit of Jones Exhibit AJ4, page 8. It appears from unexecuted copies of AWAs in evidence that employees were to commence employment with the purchaser of the Hilton Supermarket on 25 September 2006: see for example Affidavit of Jones, Exhibit AJ4, page 62.
9.The Sale Agreement identifies the purchaser of the Hilton Supermarket as Ten Talents Pty Ltd (the First Respondent), and two persons – John Patrick Keeley and Jeffrey Ehrenfeld, as guarantors: Affidavit of Jones, Exhibit AJ4, page 7.
10.The Sale Agreement required the First Respondent to offer to employ the employees of Action, not less than five business days prior to “Completion” on “total rates of pay no less favourable than the employees current rate of pay”: Sale Agreement, Clause 15.1, Exhibit AJ4, page 14. The Sale Agreement does not provide for offers of employment on terms and conditions no less favourable than the employees terms and conditions with Action: see Transcript at page 18.
11.The First Respondent offered Franklin and King employment in accordance with the terms of the Sale Agreement, but also on the condition that they enter into an AWA: Affidavit of Franklin, paras 31-32; Affidavit of King, para 36.
12.Franklin and King appear to have been employees, who in their employment with Action, were covered by the terms of the Action Supermarkets Pty Ltd and SDA agreement 2004, (“the Action Supermarkets Agreement”), an agreement certified by the Australian Industrial Relations Commission: Affidavit of Beaumont, Annexure AB1, page 3 Action Supermarkets Agreement, clause 1.3. Both Franklin and King have provided affidavit evidence about relevant events up to 25 September 2006.
13. The relevant affidavit evidence of Franklin is as follows:
a)she was employed as a Scanning Officer at the Hilton Supermarket until 25 September 2006: para 4;
b)her employment was covered by the Action Supermarkets Agreement: para 5;
c)her work as Scanning Officer included general administrative work, office work, point of sale ticketing and pricing: para 8;
d)on or around June 2006 Franklin attended a staff meeting which was also attended by Jim Kavanagh, a senior employee from Metcash, and Jack Keeley (one of the guarantors for the purchase of the Hilton Supermarket by the First Respondent) at which Kavanagh told the staff that they would not lose any existing terms and conditions as a result of a foreshadowed sale of the Hilton Supermarket: paras 12-14;
e)on or around August 2006 there was a further staff meeting at the Hilton Supermarket led by a person named “Lee”, who introduced himself as the “Grocery Co-ordinator” of the “Keeley Group”, and who told the staff that they would all be offered jobs with the new owner: paras 16 and 17.
f)In early September 2006 meetings with respect to employment contracts were arranged with staff, and ultimately an interview time was set for her on 15 September 2006: paras 20-21 and 24;
g)ultimately her interview was arranged by a person who introduced herself as Danielle Jackson “Human Resources Person for the new owner”: para 24;
h)the interview on 15 September 2006 was with Jackson and a person introduced by Jackson as Leona Ripley, who said that she worked with Jackson: para 26;
i)she was not told that she could have someone with her during the interview and had thought the interview would be “one on one”, and therefore felt “intimidated” by two interviewers being present who were “quite unfriendly”, contributing to a “ feeling of uneasiness” in the absence of a support person for her: paras 28-29;
j)prior to 15 September 2006 she “did not know that AWA’s were going to be offered … and … had thought that … employment would continue to be governed by the “Action Supermarkets Agreement”: para 31;
k)prior to attending the interview on 15 September 2006 she “did not know” that she “would be required to sign an AWA to keep [her] job”: para 32;
l)in the 15 September 2006 interview she felt that she did not have much time, was “under time pressure”, and had difficulty knowing what questions to ask concerning the AWA [having been invited to ask questions] when she had not seen a copy of the AWA until the interview and had not been able to compare it to the Action Supermarket Agreement: paras 33-35;
m)the job role she was offered under the AWA described her role as a clerical assistant rather than a shop assistant indicating that she would no longer be a Scanning Officer, which was a more senior role, a fact confirmed by the interviewers who told her that the purchaser did not have positions for Scanning Operators, but in relation to which refused to elaborate further: paras 36-38
n)one of the interviewers in the 15 September 2006 interview told her that she may be required to carry out clerical duties at an office in Jandakot (a suburb some distance away) which would be opened in the future: para 39;
o)she was told in the 15 September 2006 interview that she “would be told [her] duties were at a later stage which would be after [she] had signed the AWA”: para 39;
p)she was concerned about the absence of penalty rates under the AWA, as penalty rates under the Action Supermarket’s Agreement “considerably boosted” her income, and she was told that “we [the First Respondent] don’t pay penalty rates”: para 42 paras 40-41 and 43-44;
q)she was concerned by other matters including the apparent lack of future pay rises by reasons of existing high rates of pay; the existence of a probationary period and the non payment of leave loading: paras 45, 47 and 48;
r)on 21 September 2006 she met again with Kavanagh and expressed concern about the lack of provision in the AWA for the setting of minimum/maximum hours of work in a day or week, and later that day expressed concern with respect to possibly having to clock off for tea breaks: paras 53, 56 and 58;
s)then on 21 September 2006, she asked “what happens if I don’t sign the AWA?” and Lee said words to the effect “Well then you don’t have job with us”: para 60;
t)by 22 September 2006 she had not yet had explained to her what work she would actually be doing if she signed an AWA: para 64;
u)on the morning of 22 September 2006 when she indicated to Kavanagh that she did not think she was going to sign the AWA she was asked to make her mind “in the next 30 to 60 minutes”: para 67;
v)she would have accepted employment with the First Respondent if she had been given the opportunity to stay on the Action Supermarket Agreement because she believed that that Agreement “ had good conditions of employment and regular pay increases”: para 69.
14. King has given the following relevant affidavit evidence:
a)he worked as a dairy assistant at the Hilton Supermarket until 22 September 2006: para 6;
b)he was employed under the Action Supermarkets Agreement: para 8;
c)his duties included stacking the milk and other dairy products, checking product codes, taking and placing orders and ringing orders through and liaising with managers: para 9;
d)in or around 8 September 2006 at a staff meeting Kavanagh told the staff that “the Jack Keeley Group were going to purchase” the Hilton Supermarket and “you are all going to be offered new agreements”, or words to that effect: para 15;
e)he attended an interview on 13 September 2006 with a Mr Islip (who said he was from payroll), Jackson (who said she was a human resources person) and Lee (who said he was a manager with the new owner), with Islip saying that the three persons were “from Ten Talents” (the First Respondent), and also referring to them as being from the “Jack Keeley Consortium” of companies: para 25;
f)consequently, he understood that all the interviewers were from the First Respondent, and that he did not hear the name Cyberlink (the Second Respondent) until after he had resigned employment with Action on 22 September 2006: para 26;
g)he was not advised or offered the opportunity to take someone with him to the 13 September 2006 interview, and had he done so he would have taken someone who would have been able to assist him understand the provisions of the AWA, and who could explain them to him: para 27;
h)Islip told him that he had a week to consider the AWA, and that the job he was being offered involved “basically the same duties as your current job but on the terms and conditions of the new AWA”: para 31;
i)although he was being offered the same job there were “some significant differences in entitlements” (by inference between the Action Supermarket’s Agreement and the AWA): para 31;
j)he was concerned about job security and in particular the effect of the probationary period which he understood to mean would allow the First Respondent to terminate employment without notice during the probationary period: paras 33-35;
k)he was told at the 13 September 2006 interview by Islip words to the effect “if you don’t sign the AWA there will not be a job for you on Monday”: para 36;
l)prior to the 13 September 2006 interview he had not been told that he would be offered an AWA or that he would be required to sign an AWA to keep his job, nor was he told that he had no choice between signing the AWA or staying on the Action Supermarkets Agreement: para 38;
m)during the interview he felt quite pressured “as though he was being put on the spot”: para 38;
n)if he had been offered employment on the basis of the Action Supermarkets Agreement he would have accepted that employment as he found the Action Supermarkets Agreement “to be a better framework for securing … entitlements”, and he was particularly “concerned about job security”: para 41;
o)the AWA was a standard form document “not open to negotiation. It was take it or leave it.”: para 42;
p)there were entitlements under the Action Supermarkets Agreement that were not provided for in the AWA (“paid meal breaks and paid public holiday pay”), and he felt that he would be unable to rely on any oral assurance given by the First Respondent in relation to these items: para 45;
q)he prefers collective bargaining because he believes “that the union has greater bargaining power and can obtain better entitlements then (sic) through individual negotiation”: para 50;
r)during the period he had worked for Action he had relied on union negotiated pay increases and did not like to negotiate for himself: para 51;
s)he felt that he “was taken by surprise by new developments such as being told at the interview that [he] would be required to sign an AWA to keep [his] job”: para 59;
t)he felt under “significant pressure” during the interview on 13 September 2006, and during the period immediately prior to the sale of the Hilton Supermarket, that significant pressure relating to the signing of the AWA: para 60.”[3]
[3] Ten Talents at paras 7-14 per Lucev FM.
Further evidence from Franklin during the proceeding elicited the following:-
a)That she had worked in a number of Action Stores including Belmont, Armadale, Cannington, Maddington, Hilton, Dog Swamp, Palmyra, Spearwood, East Fremantle and Midland;[4]
[4] Transcript at 27
b)She may have been aware at least a couple of weeks prior to 22 September 2006 that AWAs were going to be the employment instrument used by the First Respondent and that if she wanted to work for the First Respondent she would need to sign an AWA;[5]
[5] Transcript at 27-28
c)That until she was advised otherwise by Mr Kavanagh from Action on 22 September 2006, she believed that if she did not accept the offer of an AWA she would “just not have a job”;[6]
[6] Transcript at 47, see also transcript at 48
d)That as a consequence of having been told by Mr Kavanagh on 22 September 2006 that if she did not accept the offer of an AWA she could continue in employment at an Action store she knew at the time that she rejected the offer of an AWA that she had the alternative of continuing in employment at an Action Store;[7]
[7] Transcript at 29-30
e)That she accepted that her function within the Action Store (Hilton Supermarket) was a store clerical function, “more in” administration and was not primarily a shop assistant’s function;[8]
[8] Transcript at 30-31
f)That she incorrectly described in her affidavit[9] that the role which she was offered under the AWA was that of clerical assistant;[10]
[9] Franklin’s affidavit at para 36
[10] Transcript at 31-32
g)That she recalled an officer of the Second Respondent telling her that it was the intention that she not be worse off under the AWA which was offered, and that it was intended that the hourly rate of pay would compensate for any loss in penalty rates;[11]
[11] Transcript at 33
h)That initially there would be no change in duties while a review was undertaken of point of sale activities in the store, but that ultimately it appears that any point of sale role would not entail exactly the same duties as those which she was performing with Action;[12]
[12] Transcript at 34
i)That in the longer term she recalled that at least two scenarios were put to her, namely that she stay in the Hilton Supermarket as a point of sale person (but not with exactly the same duties) or that she could move to the training systems area at the First Respondent’s head office (based at Jandakot);[13]
[13] Transcript at 34
j)That she understood that in the short term the role would remain exactly the same;[14]
[14] Transcript at 35
k)That she raised a number of concerns with respect to over time, tea breaks, rostered hours and the roster cycle and rates of pay with officers of the Second Respondent and that in discussions they made every effort to allay her concerns, but failed to do so;[15]
[15] Transcript at 37-38, 42 and 47-48
l)That her concerns related to:
i)Her work being taken over by other people, and the possibility that she would have to be “doing other stuff’ and the failure of the Second Respondent to clarify whether that was the case;[16]
[16] Transcript at 47
ii)That there was no guarantee of regular pay increases;[17]
[17] Transcript at 48
iii)That there may be a significant variation in hours between one week and the next (for example from 20 hours in one week to 60 hours in the next week) as a consequence of a 4 week roster cycle and that there was not a set amount of hours that she was required to do in each day, and that as she had to travel 40 minutes to work the inference was that that might be an inconvenience if she had to work for 2 or 4 hours one day and 10 hours another day;[18]
[18] Transcript at 48
m)That prior to going to a meeting of officers of the Second Respondent on 15 September 2006 she had knowledge of quite a few aspects of the AWA, but she did not have a copy of the AWA to allow her to make a comparison with the terms of the existing EBA;[19]
n)That she agreed that the existing EBA contained a clause permitting an employer to transfer employees from store to store;[20]
o)That prior to the meeting on 15 September 2006 she had had no contact with the First Respondent (purchaser);[21]
p)That at the meeting on 15 September 2006 with officers of the Second Respondent she was told that if she had further concerns she ought to contact those officers (Ms Jackson or Ms Ripley), and that in the seven days prior to her final meeting with Ms Jackson on 22 September 2006 she did not contact them with any concerns;[22]
q)Prior to the final meeting with Ms Jackson on 22 September 2006 she had had a copy of the offered AWA for a period of 7 days;[23]
r)That although she had never been told that she would get an offer of employment on the terms and conditions of the EBA her existing employer (Action) had told her that she “wouldn’t lose anything”;[24]
s)She knew that if she did not accept an offer of employment on the terms and conditions that the First Respondent was offering that she would not have a job at the Hilton Supermarket;[25]
t)That at the meeting on 15 September 2006 with Ms Jackson and Ms Ripley from the Second Respondent she was taken through the AWA documentation, but they did not read every word of the document and some pages of the document were missed;[26]
u)That before she went to the interview with Ms Ripley and Ms Jackson from the Second Respondent on 15 September 2006 she was already feeling stressed;[27]
v)That in relation to the unpaid tea breaks she was concerned that what she was being told in relation to what would occur in respect to tea breaks if she accepted an offer of an AWA was not being put in writing by the First Respondent or the Second Respondent on behalf of the First Respondent.[28]
[19] Transcript at 40
[20] Transcript at 40
[21] Transcript at 41
[22] Transcript at 42-43
[23] Transcript at 43
[24] Transcript at 44-45
[25] Transcript at 46
[26] Transcript at 46
[27] Transcript at 46
[28] Transcript at 47
The Court considers that Ms Franklin did her best to assist the Court with her evidence. There were a number of occasions on which she could not remember what was said precisely at a particular meeting, there having been a number of meetings involving a number of parties during the course of the relevant events, and in the circumstances that is probably not surprising. There were one or two minor infelicities in her affidavit, which she conceded in cross-examination. But in the Court’s view there was no deliberate attempt to mislead in the affidavit. The Court considers that Ms Franklin did her best, some time after the relevant events, to recollect relevant matters.
Further evidence from King during the proceeding elicited the following:-
a)On 18 August 2006 he completed an expression of interest in employment with the First Respondent;[29]
[29] Transcript at 8 Exhibit 1R1
b)That by the time he had a conversation with fellow employees at the Hilton Supermarket on or about 11 or 12 September 2006, he knew that AWAs were to be offered by the First Respondent,[30] and he knew that if he wanted a job with the First Respondent he would have to accept an offer of an AWA;[31]
[30] Transcript at 10 and 14
[31] Transcript at 11
c)That it was therefore wrong to say, as he had said in his affidavit[32] that he was taken by surprise by the offer of an AWA by the First Respondent;[33]
d)He evinced a concern to other employees about the removal of public holiday pay,[34] in circumstances where he knew that public holiday pay was not being removed by the AWAs and agreed, after some equivocation, that he had no basis in fact for the concern (and it is fair to observe he had, as Counsel for the First Respondent had originally suggested to him,[35] thereby created a false issue) and as Counsel for the Second Respondent suggested to him that the Second Respondent’s officers were “at pains” in the interview to ensure that he understood that the intention was to pay him the rate he was being paid;[36]
e)He knew that he could attend the interview with someone if he wished, but chose not to have someone attend with him,[37]
f)He was feeling pressure before he went to the interview,[38] even though no one from the First Respondent had “come hassling” him about the offer;[39]
g)He did not appoint a bargaining agent, even though he recognised that he had the ability to do so;[40]
h)That he knew that if he did not accept the First Respondent’s offer of an AWA, he had to discuss his future employment with his then current employer (Action), and that redundancies were not on offer;[41]
i)The basis on which he made his decision as to whether to accept an AWA or not was included in his understanding that redundancies would not be offered;[42]
j)That he knew that he was able to say “no” to the AWA offer;[43]
k)He did not accept the First Respondent’s offer of an AWA or his existing employer’s offer of a transfer to another store;[44]
l)His decision as to whether to accept an AWA or not was not based on financial gain or the prospect of a redundancy, but rather obtaining more suitable employment for himself, and particularly “a different career in IT and massage.”[45]
[32] King’s affidavit at para 59
[33] Transcript at 15
[34] King’s affidavit at para 47
[35] Transcript at 12
[36] Transcript at 17
[37] Transcript at 16
[38] Transcript at 18
[39] Transcript at 17
[40] Transcript at 18 and 23
[41] Transcript at 12
[42] Transcript at 13
[43] Transcript at 19
[44] King’s affidavit at paras 52-53
[45] Transcript at 13
The Court was not particularly impressed by King as a witness. He appears to have been all too ready to make assertions adverse to the First Respondent in his affidavits, with no or a limited basis in fact, only to withdraw or resile from them in cross-examination. In so doing he was often generally equivocal, before conceding the point to Counsel. King also gave his evidence in a manner which indicated he was not overly concerned about its effect or outcome. In the Court’s view that is entirely consistent that the fact that his focus at the time of the relevant events was on obtaining other more suitable employment outside of the retail industry.
There was further evidence on behalf of the Applicant from Ms Balding, the Applicant in the matter, and Mr Jones and Ms Beaumont. Most of that evidence was formal, or necessary for the purpose of submitting certain documents to the Court.
The Respondents led evidence from a number of witnesses as follows:
a)Gary Paul Correia, for the First Respondent;
b)Danielle Jackson, for the Second Respondent;
c)Ryan Glen Islip, for the Second Respondent;
d)Liona Claire Ripley, for the Second Respondent.
Jeffrey Ehrenfeld was also called to give evidence. He was not called by the Second Respondent, upon behalf of whom he had sworn an affidavit in support of the Reply filed with the Court. For reasons, which, upon review, are adequately set out by the Court in transcript,[46] Mr Ehrenfeld was called to give evidence.
[46] Transcript at 103-104
Mr Correia gave evidence as to:
a)The links between the First Respondent, Ten Talents, and the Second Respondent, Cyberlink, and the fact that Cyberlink was contracted to deal with the employment issues concerning the purchase of the Hilton Supermarket by the First Respondent, Ten Talents;[47]
b)That Cyberlink was told by Correia, on behalf of Ten Talents, to offer employment in the Hilton Supermarket on the basis of AWAs on the conditions set out in the AWAs with the only variation to be in the rates of pay so as to comply with contractual obligations under the Sale Agreement to ensure that no employee taking up employment with Ten Talents was paid a lesser rate of pay in the new employment by Ten Talents;[48]
c)Correia approved the AWA that was ultimately offered;[49]
d)That a butcher that was employed by Ten Talents at the Hilton Supermarket requested and received a pay rise authorised by Correia.[50]
[47] Transcript at 62, 64 and 66
[48] Transcript at 65
[49] Transcript at 66
[50] Transcript at 67
The evidence of Ms Jackson was as follows:
a)Increases in pay rates were approved for some employees being employed at the Hilton Supermarket by Ten Talents, specifically the baker and the fruit and vegetable manager;[51]
[51] Transcript at 71
b)That because it had been difficult to fill other roles generally it was important to retain the staff for the Hilton Supermarket site;[52]
[52] Transcript at 72
c)Employees being offered employment by Ten Talents were not advised that they might have an entitlement to redundancy benefits if they did not accept the AWA offer by Ten Talents, but that in every instance she told employees that if they chose not to accept the AWA that they were to go to speak with their current employer;[53]
[53] Transcript at 73
d)That if an employee wanted to stay working at the Hilton Supermarket they must sign an AWA;
e)That she understood that the employees were covered by an Enterprise Bargaining Agreement and that if she was unable to get them to sign an AWA and the business transmitted the EBA would continue to apply to those employees;
f)Ten Talents wanted a probationary period to be included for all employees commencing employment with Ten Talents;[54]
g)Ten Talents “plan” was to get as many employees as possible to sign an AWA and to ensure that the EBA did not apply to anyone;[55]
h)Further instructions from Mr Ehrenfeld were to offer AWAs on set standard conditions but ensure that there was compliance with the contractual obligation under the Sale Agreement that employees signing AWAs suffer no overall loss of pay;[56]
i)Each employee received an identical AWA apart from the front page and variations to a schedule containing employment details at the back of the AWA;[57]
j)That she and Mr Correia approved the final draft of the standard form AWA;[58]
k)The purpose of the interviews which were conducted with employees, including Franklin and King, was to explain the terms and conditions of the AWA, not to amend or re-negotiate them;[59]
l)Whether or not the employees were retained at the end of the 3 month probationary period contained in the AWA was to be a matter based upon performance;[60]
m)That during the interview process Ms Jackson and Ms Ripley were not able to placate the concerns that Ms Franklin had as to matters such as the tea breaks, probationary period, minimum and maximum rostered hours and pay increases;[61]
n)She was not involved in any discussion as to whether employees would or would not be told about whether redundancy from the current employer was an option open to them.[62]
[54] Transcript at 74
[55] Transcript at 76
[56] Transcript at 77
[57] Transcript at 83
[58] Transcript at 84
[59] Transcript at 85
[60] Transcript at 86
[61] Transcript at 87
[62] Transcript at 88
The evidence of Mr Islip was, in substance, to the following effect:
a)That he took instructions from the director of the Second Respondent, Cyberlink, Mr. Ehrenfeld, as well as through Ms Jackson;[63]
b)He did not recall any discussion amongst the group of persons dealing with the Ten Talents offers of employment concerning redundancy benefits;[64]
c)There was not going to be any discussion about the employment of employees by Action;[65]
d)His instructions were to make offers of employment on the basis of an AWA with set conditions only subject to making sure that the contractual obligations under the Sale Agreement concerning the rate of pay not being less than it previously was were met.[66]
[63] Transcript at 91
[64] Transcript at 91
[65] Transcript at 92-93
[66] Transcript at 93
Ms Ripley said that she did not get any instructions concerning mentioning redundancy payments to the Actions employees that she was offering employment to on behalf of Ten Talents.[67]
[67] Transcript at 100
The evidence of Mr Ehrenfeld was to the following effect:
a)That he was the sole director, and he thought the public officer, of Cyberlink;[68]
b)He was involved in the Sale Agreement between Action and Ten Talents by negotiating that agreement;[69]
c)There was a business connection between the First Respondent Ten Talents and the Second Respondent Cyberlink in that Cyberlink performed services for Ten Talents;[70]
d)Cyberlink had been paid on a fee for service basis for the services provided;[71]
e)He agreed that he “must have” given instructions to Ms Jackson that the employees were only to be offered AWAs on set conditions subject to variants in pay rate to meet the contractual obligations under the Sale Agreement;[72]
f)The position with the redundancy of the employees from Action was not a matter for Cyberlink and Action had made it clear to Cyberlink that that was a matter for Action not Cyberlink.[73]
Consideration
[68] Transcript at 106
[69] Transcript at 107 and 109
[70] Transcript at 111
[71] Transcript at 112.
[72] Transcript at 114.
[73] Transcript at 116-117.
Generally
It is clear from the evidence:
a)That it was always the intention of the First Respondent that AWAs be offered to employees of Action at the Hilton Supermarket;
b)The First Respondent engaged the Second Respondent to perform tasks associated with obtaining employees and offering AWAs to Action employees at the Hilton Supermarket;
c)By reason of clause 15.1 of the Sale Agreement the First Respondent was obliged to offer employment to the Action employees at the Hilton Supermarket “on total rights of pay and no less favourable” than the rate of pay with Action;
d)The Second Respondent developed a plan for the offering of AWAs in conjunction with the First Respondent;
e)The plan involved the offering of an AWA with a standard set of terms and conditions, save as to pay rates, in respect of which the First Respondent had to comply with the total rate no less favourable;
f)There was no ability for any employee to negotiate;
i)A different form of industrial instrument covering their employment;
ii)Different terms and conditions;
from those contained in the AWA being offered by the First Respondent;
g)In order for employees to continue to work in the same job at the Hilton Supermarket they had to sign an AWA;
h)The offers made to King and Franklin by the First Respondent were for the same job, but in the case of Franklin with the possibility of future change, that they performed with Action at the Hilton Supermarket;
i)The offer of the same job was subject to a probationary period, which entailed a performance assessment of each employee during the three month probationary period.
King
King admitted under cross-examination by Counsel for the First Respondent that what he wanted to do was pursue a different career in information technology and massage.[74] In response to a question from the Court he said that he had “plans to pursue employment in another field”, [75] and even if he had taken up the offer of employment with the First Respondent under an AWA “it wouldn’t be for very long”.[76] He said that during the interview on 13 September 2006 “I had decided not to pursue my employment and I left it at that.”[77]
[74] Transcript at 13.
[75] Transcript at 24.
[76] Transcript at 24.
[77] Transcript at 24.
There were other indicators that King did not intend to pursue obtaining employment with the First Respondent:
a)he did not raise any issues with the Second Respondent’s officers when he was interviewed;
b)he knew that he had a choice not to sign the AWA;
c)he did not appoint a bargaining agent;
d)he took no-one to the interview with him.
The Court has come to the view that most probably prior to, but if not prior then at, the interview on 13 September 2006 King had decided to pursue an alternative career and therefore did not intend to sign any AWA, or undertake any employment, that was offered to him by the First Respondent.
In those circumstances the Court does not consider that as a matter of fact the Respondents could have applied duress to King. The application as it relates to King will therefore be dismissed.
Franklin
With respect to Franklin:
a)When she was interviewed on 15 September 2006 in relation to her possible employment with the First Respondent Franklin raised a number of issues with the officers of the Second Respondent conducting that interview, including issues relating to tea breaks, overtime and the rostering of minimum and maximum hours;
b)The concerns raised by Franklin were discussed with her by the officers of the Second Respondent, but were not able to be alleviated, because the terms of the AWA were set and unchangeable in those respects;
c)That until 22 September 2006 when she told Kavanagh, an officer of Action, that she was not going to accept the position offered by the First Respondent, and he told her that Action would continue to employ her (but in a different store and at a different locality), she believed that if she did not accept the job with the First Respondent she would not have a job at all.
Conclusions and Orders
The application as it relates to King must be dismissed.
The remaining question is whether the First Respondent and Second Respondent applied duress to Franklin.
Merely offering AWAs is not the application of duress.[78] However, in this case there was a plan to offer only AWAs. The AWA to be offered had set terms and conditions which were not negotiable. Franklin had concerns over some of those terms and conditions but was not able to negotiate any of them including even small matters such as the provision of paid tea breaks. Although there was an ability to adjust the overall rate of pay this was not a matter truly to be negotiated. Rather it was a matter in respect of which the First Respondent had a contractual obligation to pay a rate of pay no less favourable than that previously being paid, and if a query arose with respect to that issue, it was an accounting exercise to determine the appropriate rate of pay.
[78] WR Act s.400(6)
In order to continue to be employed in the same job at the same place Franklin had to agree to the standard not negotiable terms of the AWA, and was not able to be employed on or negotiate any other form of industrial instrument in relation to that employment. Further, after the probationary period she might be terminated from the job she had been doing if she did not perform. That, and the refusal to negotiate a different industrial instrument and terms and conditions demonstrated, and were an exercise of, the power disparity between Franklin and the Respondents. In the circumstances that constituted the application of duress in relation to her as an employee in connection with an AWA.[79]
[79] Schanka v Employment National (2001) 112 FCR 101 at 138-139 and 144-147 per Moore J; ASU v Electrix Pty Ltd (1999) 53 IR 43 at 45 per Marshall J; Bishop v Ropolo Services Pty Ltd (2006) 153 FCR 357 at 371-372 per Madgwick J
In this case, there was a sufficient relationship between the First and Second Respondents by reason of the arrangements made for the Second Respondent to act as the First Respondent’s agents in dealing with the employees and offering them AWAs, the terms of the Sale Agreement between the First Respondent and Action the employer of the employees, and by reason of the making of the offers in accordance with that Sale Agreement to the employees, to facilitate a finding of duress in respect of Franklin.
In this case the actual application of duress was by the officers of the Second Respondents in the course of their dealings with Franklin in relation to the offer of an AWA to her.
Thus the Second Respondent has contravened s.400(5) of the WR Act.
The First Respondent has also contravened s.400(5) of the WR Act. It was involved in the contravention by reasons of the plans which were put in place by it and the Second Respondent for the making of offers of non negotiable AWAs, the arrangements for the Second Respondents to act on behalf of the First Respondents in offering those AWAs, and the action of the First Respondent in approving the standard terms of the AWA. By reason of s.728(2)(a) and (c) the First Respondent was involved in the contravention, and therefore by reason of s.728(1) has contravened s.400(5) of the WR Act.
The Court notes that in determining the contraventions it has not relied upon the fact that the officers of the Second Respondent did not raise with Franklin the issue of possible redundancy or her ongoing employment with Action. On the evidence, it appears that Action indicated to the First Respondent that those were matters for it rather than the First Respondent or the Second Respondent acting on the First Respondent’s behalf, and therefore those matters were not raised with Franklin by officers of the Second Respondent in the process of offering AWAs.
There will therefore be a declaration that the First Respondent and Second Respondent have contravened s.400(5) of the WR Act by the application of duress to Debbie Lee Franklin in connection with an AWA on or about 15 to 22 September 2006.
The Court considers it appropriate, subject to any further submissions by Counsel for the parties, that the matter be adjourned to a directions hearing for the giving of directions with respect to a hearing as to compensation and penalties.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 6 March 2008
2
13
1