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Fair Work Ombudsman v Spotless Services Australia Ltd

Fair Work Ombudsman v Spotless Services Australia Ltd

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FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v Spotless Services Australia Ltd [2019] FCA 9

File number: WAD 636 of 2017

Judge: COLVIN J

Date of judgment: 16 January 2019

Catchwords:
INDUSTRIAL LAW - application for declaration that the respondent breached s 119(1)(a) of the Fair Work Act 2009 (Cth) - where employer terminated the employment of employees after losing a customer contract for services - where employer did not pay redundancy payments to the terminated employees - where employer sought to rely on 'ordinary and customary turnover of labour' exception in s 119(1)(a) - whether terminations were due to 'ordinary and customary turnover of labour' - whether exception should be construed by reference to industrial law decisions prior to enactment of s 119(1)(a) - whether previous decision to the effect that previous case law was of limited value in statutory construction should not be followed - declaration of contravention of s 119(1)(a) by failing to pay redundancy upon termination of employment

INDUSTRIAL LAW - whether decision to dismiss employees gave rise to an obligation to notify Centrelink of the dismissals under s 530(1) of the Act - consideration of statutory construction of phrases 'reasons of economic, technological, structural or similar nature' and 'genuine operational reasons' - no contravention of s 530(1)

Legislation: Fair Work Act 2009 (Cth) ss 3, 41, 43(1)(a), 44(1), 59, 61, 117, 118, 119, 120, 121, 122, 123, 530(1), Parts 2‑1 and 2‑2

Cases cited:
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; (2014) 254 CLR 247
Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
Bourke v Corporation of the Diocesan Synod of North Queensland operating St Mark's College as a Charitable Trust [2007] AIRC 564
C.A.L. No 14 Pty Ltd v Motor Accidents Insurance Board; C.A.L. No 14 Pty Ltd v Scott [2009] HCA 47; (2009) 239 CLR 390
Carr v State of Western Australia [2007] HCA 47; (2007) 232 CLR 138
Carter v Village Cinemas Australia Pty Ltd [2007] AIRCFB 35
Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56; (2012) 248 CLR 378
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384
Collector of Customs v Agfa‑Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389
Compass Group (Australia) Pty Ltd v National Union of Workers [2015] FWCFB 8040; (2015) 253 IR 32
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2012] FWA 3945; (2012) 220 IR 287
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297
Duncan v Altshul Printers Pty Ltd [2007] AIRC 286
Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40;

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] FCA 9
Decision Date: 16 January 2019

CaseChat Overview and Summary

The Fair Work Ombudsman has brought proceedings against Spotless Services Australia Ltd alleging that the company contravened sections 119 and 530 of the Fair Work Act 2009 (Cth). The primary issue is whether the termination of employees after the loss of a customer contract was due to 'ordinary and customary turnover of labour', thereby exempting the company from paying redundancy. A secondary issue is whether the company was required to notify Centrelink of the dismissals. The court must decide if the terminations were due to the 'ordinary and customary turnover of labour' and whether the statutory exceptions should be construed by reference to pre-existing industrial law decisions.

The court examined the principles of statutory construction, considering the context of the statutory language and the legislative intent. It found that the terminations were not due to 'ordinary and customary turnover of labour' but were a result of a commercial decision not to renew the contract. The court rejected the argument that previous industrial law decisions should be relied upon in construing the statutory language. The court held that the decision in United Voice v Berkeley Challenge Pty Ltd was correctly made and should not be departed from. Consequently, the court granted the declaration sought in respect of the contravention of s 119 and dismissed the claims concerning the alleged contravention of s 530.

The court further ordered that the claim regarding the contravention of s 530 of the Fair Work Act be dismissed. A separate case management hearing will be scheduled to determine the pecuniary penalty for the contravention of s 119 by the respondent. The court allowed liberty to apply for any further orders consequential to the determination.

Orders

Orders of the court

2. The claim that the respondent contravened s 530 of the Fair Work Act is dismissed.

3. There be a further case management hearing on a date to be fixed upon request by the applicant at which time orders will be made concerning the claim by the applicant that the respondent do pay a pecuniary penalty in an amount to be fixed for its contravention of the Fair Work Act by failing to pay redundancy pay to each of Mr Expedito Campilan, Ms Kathrine Wright and Mr Simon (Richard) Ramble upon termination of their employment in June 2015.

4. There be liberty to apply as to any further orders to give effect to or consequent upon the matters determined by the reasons delivered on 16 January 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Ombudsman says that the employees were terminated because of a commercial decision not to seek to renew its customer contracts at Perth International Airport. The Ombudsman says that a decision made by reason of cyclical or structural conditions in the economy or choices made to achieve efficiency in the conduct of a business fall within the language of the provision.Summary of decision The Ombudsman seeks declarations that Spotless has contravened s 119 and s 530 as well as pecuniary penalties. The matter proceeded to a final hearing on liability only with a separate hearing as to penalty to be held only if required. For the following reasons, the declaration sought in respect of the contravention of s 119 should be granted and there should be a separate hearing as to penalty. The claims concerning the alleged contravention of s 530 should be dismissed.Relevant principles of statutory construction The case for Spotless concerning redundancy pay depends upon it demonstrating that the phrase 'ordinary and customary turnover of labour' should be interpreted by reference to the way it submits the phrase was used in various industrial law determinations prior to the enactment of s 119(1)(a) of the Fair Work Act. It says that the recent decision of Reeves J in United Voice v Berkeley Challenge Pty Ltd [2018] FCA 224 to the effect that the previous decisions concerning the term 'ordinary and customary turnover of labour' were of limited value in construing the provision was plainly wrong and should not be followed. The claim concerning the alleged contravention of s 530(1) requires a view to be reached as to the proper construction of the provision. Accordingly, I begin by considering the relevant principles of statutory construction, particularly those concerned with matters of context. In construing a statute, the task is to ascertain the contextual meaning of the words used: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 at [14]. Statutes speak as an entire instrument so it is necessary to consider the words in the context of the instrument as a whole and to construe them so as to ensure consistency between all provisions: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69] and Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 320. The relevant context also includes legislative history and extrinsic materials: Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39]. It also includes pre‑existing law: Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; (2014) 254 CLR 247 at [42]. In an appropriate case where examination of contextual materials discloses an evident mischief that the statute was intended to remedy then the statute is to be read in that context: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408. Statutory construction involves choosing from the range of possible meanings which Parliament should be taken to have intended: Independent Commission Against Corruption v Cunneen [2015] HCA 14; (2015) 256 CLR 1 at [57]. Further, the range of meanings is itself to be informed by matters of context from the outset and not just when ambiguity is thought to arise: K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 315 and SZTAL at [14].

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	WAD 636 of 2017
Judge:	COLVIN J
Date of judgment:	16 January 2019
Catchwords:	INDUSTRIAL LAW - application for declaration that the respondent breached s 119(1)(a) of the Fair Work Act 2009 (Cth) - where employer terminated the employment of employees after losing a customer contract for services - where employer did not pay redundancy payments to the terminated employees - where employer sought to rely on 'ordinary and customary turnover of labour' exception in s 119(1)(a) - whether terminations were due to 'ordinary and customary turnover of labour' - whether exception should be construed by reference to industrial law decisions prior to enactment of s 119(1)(a) - whether previous decision to the effect that previous case law was of limited value in statutory construction should not be followed - declaration of contravention of s 119(1)(a) by failing to pay redundancy upon termination of employment INDUSTRIAL LAW - whether decision to dismiss employees gave rise to an obligation to notify Centrelink of the dismissals under s 530(1) of the Act - consideration of statutory construction of phrases 'reasons of economic, technological, structural or similar nature' and 'genuine operational reasons' - no contravention of s 530(1)
Legislation:	Fair Work Act 2009 (Cth) ss 3, 41, 43(1)(a), 44(1), 59, 61, 117, 118, 119, 120, 121, 122, 123, 530(1), Parts 2‑1 and 2‑2
Cases cited:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42; (2014) 254 CLR 247 Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 Bourke v Corporation of the Diocesan Synod of North Queensland operating St Mark's College as a Charitable Trust [2007] AIRC 564 C.A.L. No 14 Pty Ltd v Motor Accidents Insurance Board; C.A.L. No 14 Pty Ltd v Scott [2009] HCA 47; (2009) 239 CLR 390 Carr v State of Western Australia [2007] HCA 47; (2007) 232 CLR 138 Carter v Village Cinemas Australia Pty Ltd [2007] AIRCFB 35 Certain Lloyd's Underwriters Subscribing to Contract No IH00AAQS v Cross [2012] HCA 56; (2012) 248 CLR 378 CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 Collector of Customs v Agfa‑Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389 Compass Group (Australia) Pty Ltd v National Union of Workers [2015] FWCFB 8040; (2015) 253 IR 32 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2012] FWA 3945; (2012) 220 IR 287 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 Duncan v Altshul Printers Pty Ltd [2007] AIRC 286 Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40;