Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) v Ryan Wilks Pty Ltd

[2017] FCCA 948

FEDERAL CIRCUIT COURT OF AUSTRALIA

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA (CEPU) v RYAN WILKS PTY LTD [2017] FCCA 948

Catchwords:
INDUSTRIAL LAW – Whether Mr Horan was employed by the respondent – as at 1 February 2016 Core Talent was the employer of Mr Horan – by conduct, both parties acquiesced in a variation of the agreement of 11 February 2016 and extended the probation period in respect of which he remained an employee of Core Talent – application dismissed.

Legislation:

Fair Work Act 2009, s.566.

Cases cited:

Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104
Damevski v Giudice (2003) 133 FCR 438

Hollis v Vabu Pty Ltd (2001) 207 CLR 21

Applicant: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA (CEPU)

Respondent: RYAN WILKS PTY LTD ABN 82 056 662 938

File Number: SYG 289 of 2017

Judgment of: Judge Street

Hearing date: 10 May 2017

Date of Last Submission: 10 May 2017

Delivered at: Sydney

Delivered on: 10 May 2017

REPRESENTATION

Solicitors for the Applicant:

Mr G Noble

Allied Services Union of Australia

Solicitors for the Respondent:

Mr G Jervis

Neca Legal

ORDERS

1. The application is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 289 of 2017

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA (CEPU)

Applicant

And

RYAN WILKS PTY LTD
ABN 82 056 662 938

Respondent

REASONS FOR JUDGMENT

Background

1. This is a matter within the Court’s jurisdiction under s.566 of the Fair Work Act 2009 (“the Act”). Mr Horan is a licensed Grade 5 electrician, seeking to recover as the employee through the applicant union, an alleged shortfall of allowances in respect of shift payment, superannuation and other allowances on the basis that he was the employee of the respondent. 

2. Mr Horan gave evidence that in 2014 he received the usual employment pack from Core Talent Pty Ltd (“Core Talent”) which I find included the terms of engagement by Core Talent in respect of Mr Horan. Mr Horan provided his TFN and superannuation entity details and I find on the evidence that Mr Horan accepted the terms of engagement document by Core Talent in 2014. In 2014, Mr Horan performed a casual role for one week as an electrician in Sydney for which he was paid by Core Talent.

3. On 18 January 2016 Mr Horan saw an advertisement in relation to a licensed electrician shift worker role and made contact with Core Talent. I find Core Talent had communications with Ryan Wilks Pty Ltd (“Ryan Wilks”)in relation to providing casual hire employees for the Sydney Opera House site being worked on by Ryan Wilks.  Mr Horan was interviewed by Mr Montgomery of Core Talent, after Mr Horan had seen Mr Oliver Crome to whom he was referred by Core Talent. Mr Crome was the construction manager for Ryan Wilks and had authority to create legal relations between Ryan Wilks and labour hire entities such as Core Talent. 

4. Mr Montgomery informed Mr Horan he had been successful in relation to being put forward to perform work for Core Talent as a casual employee at the Sydney Opera House for Ryan Wilks. After that call from Mr Montgomery, a similar telephone call was made to the applicant by Mr Crome from Ryan Wilks.

Email to Mr Horan dated 30 January 2016

1. Of considerable importance was an email received by the employee of the applicant union, Mr Horan, on 30 January 2016 from Mr Crome for Ryan Wilks. The applicant’s affidavit in-chief did not address that email at all or in reply did the applicant seek to explain why he had failed to address the same. 

2. The email of 30 January 2016 to Mr Horan is as follows:-

   As discussed, you have been successful in securing a new role as Shift Maintenance Electrician at the Sydney Opera House. Your start day shall be Monday 1^st February 2016 7am.

   You shall be employed by Core Talent for a period of 12 weeks of which time this shall form the probation period. After such time where both myself and Ryan Wilks are happy with each others performance, you shall be offered a permanent position with Ryan Wilks.

3. The email referred to running through the shift work roster pay and general aspects of the role while the applicant familiarised himself with the project and site on the Monday. The email also required before Monday for the applicant to in the interim complete the Sydney Opera House online induction and provided details for those courses to be undertaken by Mr Horan. 

Cross-examination of Mr Horan

1. When pressed by the Court, Mr Horan acknowledged that when Mr Horan commenced employment from 1 February 2016, Mr Horan believed at that time that he was an employee of Core Talent.  Consistent with the terms of engagement Core Talent document, Mr Horan completed Core Talent timesheets online which clearly identified that it was Core Talent in respect of which the timesheets were being completed by Mr Horan. When this concern is taken together with the email dated 30 January 2016, I find that as a matter of credit, I reject Mr Horan’s evidence where it conflicts with that of the respondent.

Consideration of Core Talent’s Terms of Engagement

1. The terms of engagement document which I find on the balance of probabilities was signed by Mr Horan in 2014 governed the relationship in relation to the commencement of Mr Horan’s employment on 1 February 2016. That document had provisions identifying the casual nature of the assignment pursuant to which the applicant was required by Core Talent to perform services for a client.

2. The agreement identified the offering of assignments to a temporary worker and purported to set out the terms of engagement in that regard where the assignments would have been performed for clients of Core Talent.  I find that Ryan Wilks was a client of Core Talent and that their services had been engaged by Ryan Wilks pursuant to the specific terms for introduction for temporary staff.

3. As identified in the affidavit of Mr Montgomery, the provisions of the Terms of Engagement outlined that the casual employee had to acknowledge and agree that the nature of the engagement as a temporary worker meant that there would be periods when there was no suitable work available to the casual employee, acknowledging that Core Talent is under no obligation to offer Mr Horan any assignments and that the suitability for any assignment will be determined solely by Core Talent. The casual employee also had to acknowledge that Core Talent has no liability for any payment of wages, salary, leave entitlements or otherwise should Core Talent not offer the casual employee any assignment or for periods where the casual employee is not performing any assignment. The terms of engagement outlined that the extension of the period of performance of the assignment required a notification by the casual employee to Core Talent if the client, in this case, Ryan Wilks, wanted to extend the assignment performed. There was also the obligation on the casual employee to notify Core Talent if that client offered a permanent positon as well as obligations to notify Core Talent if required to work overtime or outside ordinary hours.

4. There was an expressed provision, clause 3.6 that provided:

   When performing Assignments for clients of Core Talent, you understand and agree that you are engaged and paid as a casual.

5. There was a reference to rate of pay in clause 4:

   During any Assignment, Core Talent will pay you weekly in arrears the rates specified in this agreement.

6. That appears to be a reference to the hourly rate agreed prior to accepting the assignment. I find that on or prior to 1 February 2016, Mr Horan was informed of the hourly rate of $35.16. The contractual arrangement between Core Talent and Mr Horan included an obligation to cooperate with the client and in absence of an obligation to accept an assignment that the casual employee must comply with directions of Core Talent and the client. Materially, the agreement also required timesheets to be completed at the end of each week. I accept the evidence Mr Horan that he did so consistent with the agreement in the present case. The agreement with Core Talent provided for an end or cancellation of assignment as well purported to be an entire agreement.

7. At the time that Mr Horan commenced employment on 1 February 2016, no other document had been received from Ryan Wilks.  The attention of the Court has been drawn to various authorities in relation to the indicators of the true relationship of employer and employee, in particular a reference to the decisions in Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 and also Damevski v Giudice (2003) 133 FCR 438. The Court also takes into account, the observations of the majority in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at [38] - [41] and McHugh J at [116] and in particular I note at [114].

8. I accept the evidence of Mr Montgomery that the signed copy of the agreement had been lost as a result of the entity Core Talent converting its processes to digital processes. As at 1 February 2016, whilst there were no other communications between Ryan Wilks and Core Talent, Core Talent had the power of selection of Mr Horan for payment of wages and fixing the remuneration at that time was a matter done by Core Talent.  Core Talent had a contractual entitlement to control the method of doing the work and the requirement of the employee to comply with directions also given by Ryan Wilks. At that time, it was Core Talent that asserted it had the right to terminate the services of Mr Horan. I find that as at 1 February 2016, Core Talent was the employer of Mr Horan.

Letter from Ryan Wilks dated 11 February 2016

1. On 11 February 2016, Mr Horan received a letter from Ryan Wilks entitled “Employment Offer – Licensed Electrician (Shift)” relevantly provides as follows:- 

   Please read this employment letter of offer carefully. If you are unclear on any information contained within this document, please contact me so that the issue can be discussed.

   1. We offer you employment as a Licensed Electrician (Shift) for Ryan Wilks Pty Limited to commence on Monday 1^st February 2016.

   2. Your conditions of employment will be as nominated in the Fair Work Commission Enterprise Agreement based on document SOH 531 Shift Roster Example for the Sydney Opera House Maintenance Shift Works and Electrical, Electronic and Communications Contracting Award 2010. Your nominal time hourly rate will be $35.16. 4.

   3. Your shift hours of work will be in line with the Sydney Opera House Maintenance Shift Roster and shall be based around an average 38 hour working week over a 3 week rotating shift roster. Shift comprises of Day Shift (7am until 3pm) and Afternoon Shift (3pm until 11pm). It is expected that, from time to time, you will be required to perform work outside these hours. You will be entitled to a 20 minute paid lunch break each shift.

   4. As a Licensed Electrician, you will be responsible to and report to your Project Manager and or Oliver Chrome (Construction Manager).

   5. This contract may be terminated by either party in accordance with the following:

   a) During the first 12 weeks probation period via Core Talent Pty Ltd, your performance and the performance of the company will be reviewed which allows either the employer or the employee to terminate the employment for any reason.

   b) After 12 weeks probation period the minimum required period of notice of termination to be given by either you or the Company is 4 weeks or by the forfeiture of payment in lieu thereof. A breach of the conditions of employment may result in the termination of your employment without notice.

   6. Acceptance is conditional upon signing and returning this letter.

   7. To accept this position, sign both copies of this letter and return them to me. Once both copies have been signed by both parties, you can retain one copy of your records.

   On behalf of the Company, I welcome you into this new role.

2. Mr Horan confirmed that he had read, understood, been given the opportunity to seek advice and accept the terms and conditions of employment contained in the offer and accepted the offer of employment on 11 February 2016. That letter purported on its face to offer Mr Horan employment as a licensed electrician (shift) for Ryan Wilks commencing on 1 February 2016. The letter purported to identify the conditions of employment were ones that will be as nominated in the Fair Work Commission Enterprise Agreement and in accordance with the Electrical, Electronic and Communications Contracting Award 2010.

3. I find the reference to the Enterprise Agreement was a reference to an Enterprise Agreement which was at that stage being negotiated between Ryan Wilks and the CEPU. That negotiation culminated in an approved proposed Enterprise Agreement in May of 2016 which was rejected by the Fair Work Commission.

4. The letter referred to “Your normal time hourly rate will be $35.16.” The letter also referred to the shift hours being in line with the Sydney Opera House Maintenance Shift Roster and referred to an entitlement to a 20 minute paid lunchbreak each shift. The letter also dictated that the applicant would be responsible in reporting to the Project Manager and or the construction manager, Mr Oliver Crome.

Consideration of the relationship between the Mr Horan and Core Talent

1. Materially, the letter then referred to the contract being able to be terminated by either party in accordance with the following. In this regard, the letter referred to:

   “During the first 12 weeks probation period via Core Talent Pty Ltd, your performance and the performance of the company will be reviewed which allows either the employer or the employee to terminate the employment for any reason.”

2. The reference to Core Talent was accepted by Mr Noble on behalf of the applicant that the above paragraph and reference to Core Talent gave rise to an ambiguity in respect of the agreement. That ambiguity is one as to the work done by the concept of via Core Talent and the role of employment. Whether this document and the signing of the same gave rise to a position of employer and employee between Mr Horan and Ryan Wilks is a matter for an objective assessment based on the whole of the indicators as to the true relationship between the parties. It is material in that regard that at the time of this letter, Mr Horan was in fact an employee of Core Talent. Both parties to the letter dated 11 February 2016 being Ryan Wilks and Mr Horan, were aware of the email which clearly identified that the applicant shall be employed by Core Talent for a period of 12 weeks. In the context of that email on its proper construction, I find that the employment offer of 11 February 2016 was one in respect of which there was an offer of employment after completion of the first 12 weeks probation period. 

3. I accept that the formal document of 11 February 2016 in its execution was intended to create legal relations. I find that that letter was intended to give rise to an employment relationship between Ryan Wilks and Mr Horan at the end of the probation period. I find however, prior to the end of the probation period that Ryan Wilks relevantly informed Mr Horan that it wished the probation period to continue because of the anticipated approval of the enterprise bargaining agreement in respect of which Mr Horan was playing the role of the delegate on behalf of the CEPU and Ryan Wilks on the Sydney Opera House site.

Consideration of steps taken after the 12 week period expired

1. I find Mr Horan was well aware of the negotiation of that enterprise bargaining agreement and whilst Mr Horan refrained from agreeing to formally sign a proposed variation of the probation period, I find that by the conduct of both parties, Mr Horan acquiesced in a variation of the agreement of 11 February 2016 extending the probation period in respect of which he remained an employee with Core Talent. 

2. No step was taken by Mr Horan following the expiry of the 12 week period to cease completing the timesheets consistent with the agreement remaining in place with Core Talent and consistent with him remaining an employee of Core Talent. No step was taken by Mr Horan to assert that he was now entitled to the status of employment as an employee of Ryan Wilks, but rather participated in continued negotiations in the hope of the benefit of the enterprise bargaining agreement.

3. I find that over the period of Mr Horan’s employment, complaints were made to Core Talent by Ryan Wilks about the performance of the work by Mr Horan and his completion of certain records. Mr Horan continued to remain on probation and as an employee of Core Talent until his services were terminated by Core Talent in June of 2016. 

Finding in respect of Mr Horan remaining an employee of Core Talent

1. Whilst Mr Horan did continue to perform work for a further six week period after the 12 week probation period, I find that in that period, he was the employee and remained the employee of Core Talent. I find that Mr Horan and Core Talent acquiesced and agreed to a variation by his conduct of the agreement of 11 February 2016 extending the probation period pending the determination of the enterprise agreement.

2. As I have found that Core Talent was the employer of Mr Horan over this period, the applicant is not entitled to succeed in respect of the application brought before this Court.

3. I accept the first respondent’s submission that the rate of pay that was identified was an all-purpose rate of pay. Under the terms of the agreement with Core Talent, the rate of pay was entitled to be brought into account in respect of shift allowances and other allowances the subject of these proceedings.

Consideration of the alleged underpayments

1. Mr Noble on behalf of the applicant acknowledged that if the provisions of the Core Talent employment agreement applied, Mr Horan could not succeed in making out any amount outstanding. No step was taken during the course of the evidence to address the calculations which Mr Noble submitted could be derived from the timesheets and payslips that were in evidence, together with the award and its provisions.

2. Where the applicant is seeking to recover an alleged underpayment, the applicant should have addressed in clear evidence how any alleged underpayment was quantified. In the present case, Mr Noble submitted that clause 2 of the letter of 11 February 2016 was in a form that did not permit the bringing to account of the over award hourly rate in respect of the allowances which the applicant was claiming. 

3. For the reasons given, I find that the hourly rate was not all-purpose rate and in that regard, no amount would be due  by Core Talent bringing to account the over award payments. I find no amount was due and owing even if Mr Horan as an employee of Core Talent.

Conclusion

1. Accordingly, the application is dismissed. 

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Judge Street

Date: 22 June 2017