Farrell v Choosewell Health Link Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

Farrell v Choosewell Health Link Pty Ltd [2021] FCCA 910  

File number(s): MLG 3163 of 2018
Judgment of: HER HONOUR JUDGE C. E. KIRTON QC
Date of judgment: 6 May 2021
Catchwords: INDUSTRIAL LAW – whether the First Respondent took adverse action against the Applicant contrary to s.340 of the Fair Work Act 2009 (Cth) – whether the Applicant exercised a workplace right – whether there was a breach of the Contract Call Centres Award 2010 – whether the First Respondent owes the Applicant unpaid monies in commission – whether the First Respondent failed to pay the Applicant her redundancy entitlements – whether the Second Respondent is accessorily liable for contraventions by the First Respondent pursuant to s.550 of the Fair Work Act 2009 (Cth) – where the First Respondent breached s.45 of the Fair Work Act 2009 (Cth) – no other breach found – the Application be otherwise dismissed
Legislation:

Contract Call Centre Award 2010 cls 4, 5, 8 and 22.3

Corporations Act 2001 (Cth) s 50AAA

Evidence Act 1995 (Cth) s 38

Fair Work Act 2009 (Cth) ss 45, 119, 121, 122, 335, 340, 341, 342 and 550
Cases cited:

Australian Building and Construction Commissioner v Parker [2017] FCA 564

Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16

Commissioner for Railways (NSW) v McCulloch [1946] HCA 27; (1946) 72 CLR 141

Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited (No 2) [2017] FCA 1046

CumminsSouth Pacific Pty Ltd v Keenan [2020] FCAFC 204

EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
Fair Work Ombusdman v Hu [2019] FCAFC 133

Morton v Commonwealth Scientific and Industrial Research Organisation (No 2) [2019] FCA 1754

National Tertiary Education Industry Union v University of Sydney [2020] FCA 1709

PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15

Richens v Commonwealth of Australia (as represented by the Commissioner of Australian Federal Police) (No 2) [2019] FCA 1224

Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177

The Environmental Group Ltd v Bowd [2019] FCA 951

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Number of paragraphs: 173
Date of last submission/s: 3 April 2020
Date of hearing: 9 & 10 December 2019
Place: Melbourne
Counsel for the Applicant: Mr Fuller
Solicitor for the Applicant: Pearce Webster Dugdales
Counsel for the Respondents: Mr Denton
Solicitor for the Respondents: HR Legal

ORDERS

MLG 3163 of 2018
BETWEEN:

JESSICA FARRELL

Applicant
AND:

CHOOSEWELL HEALTH LINK PTY LTD

First Respondent

ANDREW DAVIS

Second Respondent

ORDER MADE BY:

HER HONOUR JUDGE C. E. KIRTON QC

DATE OF ORDER:

6 MAY 2021

THE COURT DECLARES THAT:

1.The First Respondent breached s.45 of the Fair Work Act 2009 (Cth) by contravening cl.5 of the Contract Call Centre Award 2010 (Award) by failing to ensure that a copy of the…

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Details
Case
[2021] FCCA 910
Decision Date

CaseChat Overview and Summary

The applicant, a former employee of the First Respondent, sought declarations against the First and Second Respondents. The applicant alleged that her employment termination by way of redundancy on 12 July 2018 constituted adverse action under the *Fair Work Act 2009* (Cth) (FW Act), as it was purportedly taken because she had exercised her workplace rights to make various complaints. These complaints related to commission structures, unsafe workplace activities, bullying and harassment, inappropriate conduct, and a workplace culture unsafe for women. The applicant also claimed she was not paid her full redundancy entitlements, commission, or other monies owed, and that the respondents breached contractual provisions and an applicable award. The Second Respondent, a director of the First Respondent, was alleged to be involved in these contraventions under s 550 of the FW Act. The respondents denied these claims, asserting the redundancy was genuine, the applicant declined redeployment, certain contractual statements were aspirational, the award was not applicable or breached, and all entitlements had been paid.

The court was required to determine whether the First Respondent took adverse action against the applicant for a prohibited reason under the FW Act. This involved assessing whether the applicant's complaints constituted the exercise of a "workplace right" and whether the alleged actions, including her termination, were taken because of those complaints. Additionally, the court had to consider the applicant's claims for unpaid redundancy pay, commission, and breaches of her contract and the relevant award, as well as the alleged accessorial liability of the Second Respondent. The respondents contended that the redundancy was genuine and that the applicant was not entitled to redundancy pay as she had refused an offer of redeployment.

The court found that the First Respondent did not take adverse action against the applicant for a prohibited reason. Specifically, the court determined that the exclusion from sales group emails, alleged as the "First Adverse Action," did not constitute adverse action under s 342 of the FW Act because the action was taken by Mr Tsimeris, who was employed by a separate corporate entity (HICC) and not the applicant's employer, the First Respondent. The court reasoned that for adverse action to be established, it must be taken by the employer against the employee. While the entities were related and Mr Davis was a common figure, they were distinct legal entities, and actions taken by an employee of one entity did not automatically constitute adverse action by the other.

Ultimately, the court concluded that the First Respondent had breached clause 5 of the applicable award but not clause 8. The applicant was not entitled to a redundancy payment under s 119 of the FW Act, and her claim for commission was dismissed. The allegations of accessorial liability against the Second Respondent under s 550 of the FW Act were also dismissed. The parties were directed to confer regarding proposed orders reflecting these findings.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The Applicant seeks that the Court make declarations against the First and Second Respondents. BACKGROUND The Applicant commenced employment with Choosewell Pty Ltd (Choosewell) in January 2017 as a Health Insurance Advisor. In December 2017, Choosewell merged with another company and from this date the Applicant was employed by Health Insurance Comparison Choosewell Pty Ltd (HICC) as a Senior Health Insurance Advisor. On or around April/May 2018, the Applicant was employed by the First Respondent as a Senior Sales Advisor. The Second Respondent (Mr Davis) is a non-executive director of the First Respondent and Chief Executive Officer of HICC. He was the ‘decision-maker’ in relation to the Applicant's redundancy. In addition to the Applicant and Mr Davis, the following individuals and their roles are relevant to these proceedings:(a)Alistair Forbes was the other employee of the First Respondent and was the Applicant's manager;(b)Hugh Funston was the General Manager of HICC;(c)Nick Tsimeris was a Sales Manager at HICC and previously the Applicant's manager;(d)Mr Tsimeris' manager was Mr Funston; and(e)Ian McKenzie was the Compliance and Resolutions Manager at HICC. He reported directly to Mr Davis. During the course of the Applicant's employment with the First Respondent she communicated with Mr Forbes, Mr Funston or Mr McKenzie (individually or collectively) in relation to a number of matters as follows:(a)The Commission and Retention Structure for those who were involved in corporate sales;(b)Unsafe workplace activities such as riding on hoverboards;(c)Bullying and harassment experienced from Mr Tsimeris;(d)Inappropriate workplace conduct such as employees speaking to one another inappropriately and managers intimidating other employees; and(e)A workplace culture that was unsafe for women. On 12 July 2018, the Applicant was advised that her employment was being terminated by way of redundancy. The Issues in Dispute By way of summary, the Applicant alleges that the First Respondent:(a)Took adverse action against her contrary to s.340 of the FW Act as she had exercised her ‘workplace right’ to make various complaints in the course of her employment;(b)Failed to pay her redundancy entitlements pursuant to the FW Act and her contract of employment;(c)Breached contractual provisions relating to a safe workplace and harassment and vilification;(d)Contravened terms of the Award; and(e)Withheld monies that were owing to the Applicant by way of commission. The Applicant pleads that Mr Davis, the Director of the First Respondent, and the ‘decision-maker’, was ‘involved in’ and therefore liable for the contraventions under s.550 of the FW Act. The Respondents deny that the Applicant is entitled to any relief and that any of her claims are valid. In summary the Respondents say:(a)The Applicant was dismissed for reason of genuine redundancy;(b)The Applicant was not entitled to redundancy pay as she declined an offer to be redeployed in an equivalent position;(c)The Applicant refers to aspirational and exhortatory statements in the employment contract. They do not amount to provisions capable of being contravened;(d)The Award is not applicable to the Applicant. In the alternative, the Award was not breached; and (e)The Applicant was paid all monies and entitlements that she was owed.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The allegations against Mr Davis for accessorial liability are dismissed.Conclusion On the basis of the above it has been concluded that:(a)The First Respondent did not take adverse action against the Applicant for a prohibited reason;(b)The First Respondent has breached cl.5 of the Award;(c)The First Respondent has not breached cl.8 of the Award;(d)The Applicant is not entitled to a redundancy payment under s.119 of the FW Act;(e)The commission claim is dismissed; and(f)The claims for accessorial liability against Mr Davis pursuant to s.550 of the FW Act are dismissed. In light of these Reasons for Judgment, the parties are directed to confer in relation to a proposed minute of orders reflecting any declarations and other orders to be made. Those orders should also make provision for any compensation or penalty hearing. The Court will list the matter for further directions on 30 July 2021. The proposed minute of orders should be emailed to Chambers prior to this directions listing.

Ratio Decidendi

Legal Principle Established

Accordingly, to succeed the Applicant was required to have a source of entitlement to make the alleged complaints. Only then would the complaints be an exercise of a workplace right. CONSIDERATIONWas Adverse Action Taken? Section 342 of the FW Act defines adverse action as follows:(1)The following table sets out circumstances in which a person takes adverse action against another person. Section 335 of the FW Act provides that:In this Part, employee and employer have their ordinary meanings. The Applicant pleads that adverse action has been taken on three occasions as follows:(a)The Applicant was excluded from sales group emails and this constitutes adverse actions pursuant to s.342(1) items 1(c) and (d) (First Adverse Action);[184](b)The Applicant was directed that she was not to approach Mr Tsimeris for information and this constituted adverse action pursuant to s.342(1) items 1(c) and (d) (Second Adverse Action);[185] and(c)The Applicant's employment was terminated (by reason of redundancy) and this constituted adverse action pursuant to s.342(1) item 1(a) (Third Adverse Action).[186][184] Amended Statement of Claim, [28] to [31].[185] Amended Statement of Claim, [36]-[38].[186] Amended Statement of Claim, [63]-[69].First Adverse Action By the First Adverse Action, the Applicant pleads that she was excluded from ‘sales group emails’ by Mr Tsimeris and that when she asked Mr Tsimeris to be sent ‘sales group emails’ she was refused. The Applicant alleges that this was a prejudicial alteration of her position as she was excluded from becoming notified of relevant work matters which made it difficult for her to perform her duties to a high standard. She also claims that as she was the only sales consultant excluded from the emails, she was discriminated against.[187][187] Amended Statement of Claim, [28] to [31]. On a plain reading of the statute, adverse action has not been taken. Mr Tsimeris was not the Applicant's employer, nor was he employed by the Applicant's employer. As is clear from the Applicant's own affidavit evidence, she was ‘employed’ by the First Respondent. Her contract of employment states as much. Her pay slips indicate that it is the First Respondent who paid her wages. Her statement of claim also pleaded as much. Her ‘employer’ for the purpose of s.342 of the FW Act was the First Respondent. While the Applicant has advanced evidence to the effect that the First Respondent and HICC are related, this does not change the Court's view that the First Adverse Action must fail on the basis that the alleged adverse action was not taken by the employer against the Applicant. They are separate corporate entities. It is clear that Mr Tsimeris was not under the direction or control of the First Respondent. While Mr Davis may have been his ‘boss’ just as Mr Davis was the Applicant's ‘boss’, it remains that Mr Davis was the ‘boss’ of two separate employing entities. The sending of the emails by Mr Tsimeris was an action that arises in the context of his employment with HICC and, therefore, any actions he undertook were representations and actions taken on behalf of his employer.