Christopher Cresp v Nissan Casting Plant (Australia) Pty Ltd

[2016] FWC 3845

[2016] FWC 3845[Note: a correction has been issued to this document]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Christopher Cresp
v
Nissan Casting Plant (Australia) Pty Ltd
(U2016/116)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 15 JUNE 2016

Application for relief from unfair dismissal.

[1] Mr Christopher Cresp made an application alleging the termination of his employment by Nissan Casting Plant (Australia) Pty Ltd (“Nissan”) was unfair. Nissan objected to the application on the basis that it did not employ Mr Cresp, rather he was employed by a labour hire company Reddy’s General Services (“RGS”).

[2] At the hearing of the matter, it was agreed that the issue that needed to be determined was the identity of Mr Cresp’s employer. It was accepted by Nissan that if I found Mr Cresp was employed by Nissan then the dismissal was unfair and only remedy would need to be determined.

Background

[3] Mr Cresp had worked for Nissan from April 2008 until he resigned in January 2009. From 2013 Mr Cresp, via a labour hire company ESP Taskforce (“ESP”), performed work for Nissan.

[4] On 16 March 2015, Mr Cresp signed a contract with RGS. The contract provided that Mr Cresp was engaged as a casual technician and he was classified as a C10 employee under the Manufacturing and Associated Industries and Occupations Award 2010. His commencement date was 16 March 2015 and he was to perform work at Nissan Casting Plant Dandenong but he could be relocated to other sites. At the same time as Mr Cresp signed this contract he also signed an individual flexibility agreement.

[5] Mr Cresp gave evidence that he was interviewed by the Production Manager and Maintenance Engineer employed by Nissan about the new role. After this interview he was required to attend Mr Peter Fluder, the Human Resources Manager’s office to sign a document. He said Mr Allan Reddy was not present when he was interviewed but he was standing outside the office. He said that he saw Mr Reddy’s signature of the document he signed. 1 Mr Fluder gave evidence that Mr Reddy was in his office when Mr Cresp signed the contract. Mr Reddy owned the RGS business.

[6] Mr Cresp said that he required changes to be made to the contract and that Mr Fluder made those changes. Mr Fluder could not recall this but he gave evidence that he did not prepare the document as it was RGS’s document. He said he printed them off for Mr Reddy.

[7] Mr Cresp was provided with a uniform by RGS and RGS provided laundry services for its employees. As the provided uniform did not fit him Mr Cresp provided his own clothing and laundered them.

[8] It was not disputed that employees of the labour hire companies wore different uniforms and that they were visually distinguishable. 2 Further, while Mr Cresp did not wear a uniform provided by RGS, he wore a yellow shirt which is consistent with the colour of the uniform provided by RGS.

[9] Mr Cresp was paid varyingly by RGS and later payslips 3 were issued by Reddy General Services Pty Ltd but Mr Cresp was never offered and nor did he accept employment with Reddy General Services Pty Ltd. RGS had an ABN which was the ABN on the contract signed by Mr Cresp.

[10] Mr Reddy is also the sole shareholder and director of Reddy General Services Pty Ltd which was registered on 26 March 2015.

[11] It is not contested that in May 2014 Nissan reviewed its use of labour hire services. At this time its major if not sole labour hire provider was ESP. Nissan determined to call for tenders for its labour hire business and in mid-2014 Nissan appointed ESP, RGS and Adecco as its labour hire providers. 4

[12] It was not contested that in mid-March 2015 Nissan recommended to RGS that Mr Cresp be engaged by it to fill a new position at the casting plant. It made that recommendation based on his prior work at the site. 5

[13] On 20 December 2015, Mr Cresp received a text message from Mr Reddy stating that “Nissan has just advised me that you do not need to come to work until further notice. I’ll talk to HR tomorrow and give you a call thanks.”

[14] Mr Cresp was not sure who this message was from but that was clarified. The next day Mr Cresp received a further text from Mr Reddy advising that his tools had been packed up and would be couriered to him and he was not required to attend work again. He was told to give his gate pass to the same courier.

[15] Mr Cresp said he attended the workplace and collected his tools.

[16] It was not contested that the Senior Maintenance employee of Nissan made the decision that Mr Cresp was not longer required to attend the Nissan plant.

[17] Mr Cresp gave evidence that he was not inducted by RGS nor did he have any contact with Mr Reddy after 16 March 2015 until he received the text message in December 2015.

Who was Mr Cresp’s employer?

[18] Mr Cresp submitted that he did not enter into a contract with either Reddy General Services Pty Ltd or The Trustee for The Reddy’s Family Trust. This is not disputed.

[19] That Mr Cresp’s pay slips varyingly referred to Reddy’s General Services and Reddy General Services Pty Ltd is not determinative of the identity of the employer.

[20] Mr Cresp submitted that while the letter of offer refers to RGS as a company it was simply a sole trader.

[21] Mr Cresp submitted that the business operated by Mr Reddy was not registered for GST and that if it had 48 employees, as Mr Flooder attested to, it would have an income of over $100,000 and it would need to be registered for GST.

[22] Mr Cresp accepted that RGS carries out maintenance services and it was uncontested evidence that prior to providing services to Nissan, it provided services at Nissan’s head office. The business describes itself as a general property maintenance service provider and a provider of timber windows and doors. Mr Cresp submitted that RGS is not listed as a labour hire agency in the yellow pages. He further submitted that it did not advertise on any job sites. However there was no evidence called to support this submission.

[23] Mr Cresp submitted that RGS did not perform any labour hire function in relation to Mr Cresp prior to Mr Cresp being employed. It did not advertise his position, recruit him, interview him, or skill or reference check him or perform any of the other functions of a labour hire agency. Mr Cresp submitted that all RGS did was arrange payroll, and relay to him that Nissan no longer required him and advised him that his property would be returned.

[24] It submitted that there was no evidence that RGS had any other clients and consequently Mr Cresp could not be allocated to any other workplace. It was submitted that the arrangement between Nissan and RGS was designed to give the appearance of a third party hire arrangement and that the most that could be said was the Nissan outsourced its payroll function.

[25] Mr Cresp relied on the decision of the Full Court of the Federal Court in Damevski v Giudice and Ors 6. It was submitted that in this matter, like Damevski, there had been an ongoing and pre-existing relationship between Mr Cresp and Nissan; RGS performed none of the functions of a labour hire company prior to the new arrangement; the new arrangement was at the instigation of Nissan who nominated Mr Cresp for employment, introduced Mr Cresp to Mr Reddy and prepared the contract of employment. He further submitted that the only function performed by RGS was payroll and the arrangement was put in place to circumvent obligations under the relevant EBA and to avoid Unfair Dismissal provisions.

[26] In response to this submission, Nissan submitted that there was no pre-existing employment relationship between Mr Cresp and Nissan. At the time, Mr Cresp was employed by another labour hire company, not Nissan. It was submitted that RGS performed functions other than payroll in that it provided uniforms and laundering facilities. It was responsible for providing induction for employees but Mr Fluder was not able to say that it had in fact inducted Mr Cresp. Mr Fluder gave evidence that RGS performed the same functions as all its other labour hire suppliers.

[27] I am satisfied that Mr Cresp was not an employee of Nissan. He entered into a contract of employment with Mr Allan Reddy trading as RGS. Mr Cresp was aware of the identity of his employer when he signed the contract. He did not question that he was to be employed via a labour hire company as he had been previously employed by a labour hire company whilst performing work for Nissan.

[28] There was no challenge to the evidence of Mr Fluder and or Mr Markus Spindler, the General Manager, that Nissan made a business decision to increase the number of its labour hire providers. There was no challenge to their evidence that RGS tendered for the work. Further, it was not put to Nissan’s witnesses that this was a sham arrangement designed to avoid its obligations under the EBA or the Act.

[29] Mr Cresp relied upon the decision of the Full Court of the Federal Court in Damevski v Giudice and Ors 7. However the facts in that matter are significantly different to the facts in this matter. There, Mr Damevski had been employed by Endoxos and had been given a “choice” to resign and contract his services to MLC Workplace Solutions or not be provided with work by Endoxos at all.8 Mr Damevski was told nothing would change as a result. The contract signed by Mr Damevski was prepared by Endoxos. Mr Damevski entered into a contractor arrangement with MLC, not an employment contract. Mr Damevski was provided with a uniform by Endoxos with its livery and a mobile phone. The only thing that changed was Mr Damevski was paid by MLC who were paid by Endoxos. The court found that Mr Damevski was an employee of Endoxos.

[30] Here, the contract was not prepared by Nissan and Mr Cresp was not an employee of Nissan prior to his employment by RGS. Certainly Nissan recommended Mr Cresp to RGS but that is not unusual. Nissan had decided to rebalance its labour hire arrangements and move to a situation where it had a number of providers. That it decided that the position to be filled by Mr Cresp was to be provided by RGS rather than ESP was consistent with this decision. There was no evidence that if Nissan had not determined to source this position from RGS that Mr Cresp would have been made a direct employee of Nissan.

[31] The facts in this matter also differ significantly from those found by the Federal Court in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd 9where it was found that the arrangements made by Ramsey’s was a sham.

[32] That RGS was operated by a sole trader is not determinative of the issue. Further whether it did or did not comply with its GST obligations is also not determinative. RGS clearly is a separate business. Even if RGS only provides labour hire services to Nissan, which is not clear on the evidence before me, that is not determinative of whether RGS employed Mr Cresp.

[33] I am not satisfied that Mr Cresp was employed by Nissan. The contract of employment signed by him is evidence of an employment relationship between him and RGS. RGS performed its obligations under the contract. Mr Fluder gave evidence that RGS complied with its contractual obligations to Nissan and that evidence was not challenged.

[34] That Nissan supervisors directed his work is a common feature of labour hire arrangements. That he did not have any further contact with RGS until he was told that Nissan no longer required him to perform work is also not unusual in labour hire arrangements. Unless there were disciplinary issues that needed to be addressed, such contact would be unnecessary. That RGS did not induct Mr Cresp is not surprising given he had already worked on the site.

[35] The tendering process which led to RGS being engaged by Nissan was an arm’s length process and there is no basis to conclude that RGS was acting as an agent for Nissan.

[36] That Nissan recommended Mr Cresp to RGS does make Mr Cresp an employee of Nissan. That it chose to fill this position via labour hire is a decision it was entitled to make. Nissan’s explanation for using labour hire rather than direct employment was not challenged at the hearing.

[37] As Mr Cresp was not employed by Nissan, his unfair dismissal application must be dismissed.

DEPUTY PRESIDENT

Appearances:

A Dircks for the Applicant.

A Maher for the Respondent.

Hearing details:

2016.

Melbourne:

9 June.

 1   Exhibit A1 at [5]-[10]

 2   Exhibit R1

 3   Exhibit A2 at A1

 4   Exhibit R3

 5   Exhibit R2 at [7]

 6 [2003] FCAFC 252

 7   Ibid

 8   Ibid at [12]

 9 (2011) 198 FCR 174

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