Fong v Halliburton Australia Pty Ltd
[2019] FCCA 2885
•10 October 2019 (delivered by video link by Judge Street pursuant to s.75 of the Federal Circuit Court of Australia Act 1999 (Cth))
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FONG & ORS v HALLIBURTON AUSTRALIA PTY LTD | [2019] FCCA 2885 |
| Catchwords: INDUSTRIAL LAW – Alleged contraventions – alleged underpayments of various entitlements – claim for reimbursement of income tax – claims for additional annual leave. |
| Legislation: Fair Work Act 2009 (Cth), ss.12, 16, 18, 22, 35, 87, 90, 94, 113, 117, 119, 545, 546, 570 Federal Circuit Court of Australia Act 1999 (Cth), ss.3, 16, 75 |
| Cases cited: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14 The Shorter Oxford English Dictionary on Historical Principles, Vol. II (Oxford: Clarendon Press, 1973) |
| First Applicant: | FOOK-SENG (GEORGE) FONG |
| Second Applicant: | JAMIE CHRISTIAN ALBANIS |
| Third Applicant: | PETER REGAN |
| Fourth Applicant: | FRANLIN (FRANKLIN) (JAMES ANTHONY) LOPEZ |
| Fifth Applicant: | AARON LENG KEE |
| Sixth Applicant: | JEFFREY CRAIG CONWAY |
| Respondent: | HALLIBURTON AUSTRALIA PTY LTD |
| File Number: | PEG 297 of 2016 |
| Judgment of: | Judge Antoni Lucev |
| Hearing dates: | 6, 7, 8, 9 and 10 August 2018 |
| Date of Last Submission: | 10 August 2018 |
| Delivered at: | Sydney (via video-link to Perth) |
| Delivered on: | 10 October 2019 (delivered by video link by Judge Street pursuant to s.75 of the Federal Circuit Court of Australia Act 1999 (Cth)) |
REPRESENTATION
| Counsel for the Applicant: | Mr T Caspersz |
| Solicitors for the Applicant: | Workplace Law Perth |
| Counsel for the Respondent: | Mr J Blackburn SC |
| Solicitors for the Respondent: | HLS Legal |
ORDERS
That the application, as amended, be dismissed.
That the respondent have leave to file and serve, within 10 days, an application in a case for the costs of the claim made by the first and second applicants for income tax reimbursement.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 297 of 2016
| FOOK-SENG (GEORGE) FONG |
First Applicant
| JAMIE CHRISTIAN ALBANIS |
Second Applicant
| PETER REGAN |
Third Applicant
| FRANLIN (FRANKLIN) (JAMES ANTHONY) LOPEZ |
Fourth Applicant
| AARON LENG KEE |
Fifth Applicant
| JEFFREY CRAIG CONWAY |
Sixth Applicant
And
| HALLIBURTON AUSTRALIA PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of an application filed in the Fair Work Division of this Court on 7 July 2016 a total of 14 orders were sought declaring the respondent, Halliburton Pty Ltd (“Halliburton”), contravened a number of provisions of the Fair Work Act 2009 (Cth) (“FW Act”) in the course of the employment of:
a)Mr Fook-Seng (George) Fong (“Mr Fong”);
b)Mr Jamie Christian Albanis (“Mr Albanis”);
c)Mr Peter Regan (“Mr Regan”);
d)Mr Franlin (Franklin) (James Anthony) Lopez (“Mr Lopez”);
e)Mr Aaron Leng Kee (“Mr Kee”); and
f)Mr Jeffrey Craig Conway (“Mr Conway”),
(together, the “Applicants”).
On the first day of the 5-day hearing of the matter, being 6 August 2018, the Applicants sought to make amendments to the application filed on 7 July 2016 in the form of a proposed minute of amended final orders (“Proposed Amended Orders”) and in doing so expressly raised two new claims, and impliedly made a “hidden claim” (as Senior Counsel for Halliburton described it). The Court refused leave to raise claims pertaining to the two new proposed orders sought and the implied third claim and indicated it would incorporate the reasons for doing so in the final judgment. Those reasons are set out below.
Background
Halliburton provides services and products to the upstream oil and gas industry in the Australasian region and employs Field Engineers and Directional Drillers (Field Employees) to provide services to clients in the field on offshore or onshore rigs. When not on a rig Field Employees and Directional Drillers could be required to perform work in a Real Time Operations Centre (RTOC), at Halliburton’s Perth office, in the Halliburton workshop located in Kewdale and later Jandakot, or to attend training. The relevant time period this claim is concerned spans from 2010 until 2016.
The Applicants were employed by Halliburton in the following capacities:
a)Mr Conway and Mr Lopez as Directional Drillers;
b)Mr Fong, Mr Albanis and Mr Regan were Field Engineers; and
c)Mr Kee was an electrical mechanical technician until 26 July 2012 when he was promoted to a Field Engineer effective thereafter.
Proposed Amended Orders
On 1 August 2018, and amended pursuant to r.16.01 of the Federal Circuit Rules 2001 (Cth) to correct a spelling oversight, the Court issued consent orders in the following terms:
1. The proceedings in respect of all of the applicants' claims alleging coverage by and contraventions of a modern award be discontinued.
2. The proceedings in respect of all of the applicants' claims alleging contraventions of the Fair Work Act 2009 in respect of maximum weekly hours, reasonable additional hours and public holidays be discontinued.
3. There be no order or future order as to costs in relation to that part of the proceedings discontinued by orders 1 and 2.
It suffices to note that these claims appeared to be discontinued on the basis that the parties were in agreement, or that neither party proposed to suggest or press, that the Applicants were covered by a modern award. On that basis at the commencement of the hearing on 6 August 2018 the Court was provided with the Proposed Amended Orders as follows:
1. A declaration that the Respondent contravened s.44 of the Fair Work Act 2009 (Cth) (Act) when it failed to pay the Applicants in accordance with:
a) s.90(1) of the Act (payment for annual leave taken); and
b) s.90(2) of the Act (payment on termination of employment for accrued untaken annual leave), by not paying a rate of pay (the Applicants' base rate of pay) that included an operating day rate (the ODR) for 84 hours per week (the ordinary hours of work).
2. A declaration that the Respondent contravened s.44 of the Act in that it failed to comply with s.87(2) of the Act, when it failed to accrue the Applicants' entitlement as continuous shift workers under s.87(3) of the Act to five weeks of paid annual leave for each year of continuous service.
3. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.90(2) of the Act (payment on termination of employment for accrued annual leave) their entitlement as continuous shift workers under s.87(3) of the Act to five weeks of paid annual leave for each year of continuous service.
4. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.117(2)(b) of the Act (payment in lieu of notice of termination) their full rate of pay for the ordinary hours of work by not paying an amount that included all payments including, but not limited to, the ODR.
5. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.119(2) of the Act (redundancy payments) the Applicants' base rate of pay by not paying a rate of pay that included the ODR.
6. A declaration that the Applicant Fook-Seng (George) Fong (Fong) was entitled to accrue an entitlement under s.90(1) of the Act to paid annual leave for the period July 2010 to January 2011 according to the ordinary hours of work.
7. A declaration that Fong was entitled to be paid in accordance with s.90(2) of the Act on termination of his employment for the annual leave accrued during the period July 2010 to January 2011.
8. That a pecuniary penalty be imposed on the Respondent in respect of each of the contraventions of the Act referred to above.
9. That the Respondent pay to the Applicants compensation for their loss suffered by reason of the Respondent's contraventions as specified above and as particularised in the Applicants' Revised Addendum to Outline of Submissions (Revised Addendum).
10. That the Respondent pay Fong and the Applicant Jamie Christian Albanis (Albanis) damages for breach of their contracts of employment when it failed to reimburse them for income tax payments on income earned by them outside Australia.
11. That the Respondent pay damages for breach of the contracts of employment of Fong and Albanis and the Applicants Peter Regan (Regan) and Jeffrey Craig Conway when it failed to take into account the ODR in calculating payment for their entitlement on termination of employment to long service leave under the Long Service Leave Act 1987 (SA).
12. In the alternative to order 11 above, that the Respondent pay compensation to the Applicants listed in order 11 above, for not complying with the Long Service Leave Act 1958 (WA) when it failed to take into account the ODR in calculating payment for their entitlement on termination of employment to long service leave.
13. That the Respondent pay damages for breach of the contracts of employment for Fong, Albanis, Regan and the Applicant Aarron Leng Kee when it breached its Redundancy Standard by failing to properly consult with such Applicants.
14. That the Respondent pay to the Applicants interest on the compensation and damages claimed above as particularised in the Revised Addendum.
15. That the Court makes any further orders in favour of the Applicants as the Court deems fit.
The Court expressed to the Applicant’s Counsel that given the discontinuance of some claims the Court expected the Proposed Amended Orders to be less than those in the application originally filed on 7 July 2016, and therefore new claims must be raised which the Applicants sought leave to rely upon and press in the forthcoming hearing, specifically orders 11 and 13. The following submissions were made in support of the Court granting such leave to the Applicants:
a)proposed order 11 now puts the claim for the Long Service Leave of Mr Fong, Mr Albanis, Mr Regan and Mr Conway on the basis of a contractual term that long service be paid pursuant to the Long Service Leave Act 1987 (SA), and alternatively order 12 which asserts the claim on the basis of the Long Service Leave Act 1958 (WA) (“LSL Act WA”) which claim was made in the original application filed 7 July 2016;
b)proposed order 13 claims that the respective applicants were entitled to the benefit contractually of Halliburton’s redundancy standard which included an obligation to properly consult and there was a breach of that term which the respective applicants now claim damages for;
c)proposed order 13 concerns consultation, previously also premised on award coverage which was discontinued, but which is now being pursued on a contractual basis, but which still needed to be finalised in the Applicant’s revised addendum which was still incomplete at the commencement of the hearing (and remained so until handed up shortly prior to the hearing concluding on 10 August 2018);
d)there was correspondence between the parties in relation to the new claims but the nature of the new claims was not foreshadowed to Halliburton until 27 July 2018, being a Friday night (and thus, the Court interpolates, effectively, five working days before the commencement of a five day hearing);
e)this matter started off with a bevy of claims that have been narrowed substantially from a legal point of view and an evidentiary point of view by the Applicants agreeing to effectively abandon those claims and it is fair to say that that was a process which took some time to develop and really started developing from about the start of July 2016;
f)none of the new claims raise any requirement for new evidence as all of the evidence which is being relied upon is already in the materials that have been filed by the parties;
g)the Applicants accept that there is prejudice to Halliburton from the new claims that have been made however on balance the prejudice to the Applicants from not being able to run the new claims is greater because effectively it means that they will be shut out of this Court and would need to pursue those claims in a common law court with the costs and inconvenience attendant upon that; and
h)in relation to superannuation, that is related to the compensation that is being claimed and that has always been claimed, while it has not been particularised it is consequential and a matter of quantum going to compensation, therefore it is not a new claim.
Halliburton opposed the Applicants raising the new claims on the following basis:
a)the Applicants have had three attempts at the Long Service Leave claim which was originally based on s.113 of the FW Act by reference to the Victorian Long Service Leave Act, or in the alternative the Western Australian Long Service Leave Act, however the South Australian Long Service Leave Act is now relied upon on the basis of the contract of employment which it was not previously in circumstances where the matter has been on foot for over two years and has only just been raised;
b)not only were the Proposed Amended Orders provided late, there are no submissions and no grounds to support them and Halliburton is left not truly knowing the basis of the Applicant’s case and having to respond, very much, on the run, so there is clear prejudice;
c)there is no explanation given as to why these claims have been made so late when the Applicants have had two years to make them, and further where they have had the evidentiary materials filed by Halliburton for over a year;
d)there is a further new claim (the “Hidden Claim” referred to in [3] above), in the incomplete revised addendum which states “Superannuation to be added as a matter of law” without calculations to indicate on what item superannuation is being sought, or the basis on which the Court is asked to consider the superannuation claim; and
e)further difficulties arise with respect to the incomplete revised addendum and the negligible submissions on the tax claim in the Applicants’ submissions, such that Halliburton have no idea what the tax claim is or how much the Applicants are claiming.
On 6 August 2018 the Court indicated that leave to rely on, or pursue Proposed Amended Orders 11 and 13 was refused while also indicating that any superannuation claims would not be entertained. An order reflecting such was made on 7 August 2018 in the following terms:
1. The applicants’ minute of proposed amended final orders, save for orders 11 and 13 therein, be substituted for the final orders sought in the Originating Application filed 7 July 2016
It was unnecessary to make any order regarding the “hidden” superannuation claim as, in the Court’s view, no indication or claim had ever been so made prior to the brief nine word assertion in the incomplete addendum of submissions.
This Court has the power to allow a party to make an amendment at any stage of the proceeding and notwithstanding the effect may be to include a new cause of action in proceedings already on foot: FCC Rules, rr.7.01, 7.03. When the Court is called upon to consider if leave to amend ought be granted the following factors for consideration are commonly cited as being of assistance and guidance to the exercise of the discretion:
a)considering if the nature of the proposed amendment is in the interests of justice in light of the stage in the proceedings and the explanation for the need to make the amendment;
b)whether the amendment sought and grounds for the amendment would be “obviously futile”;
c)the nature of any prejudice and the means by which prejudice may be redressed;
d)the objects of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”) and the FCC Rules; and
e)case management principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14; [2009] HCA 27 at [30] and [97]-[103].
See Lukies v S2V Consulting Pty Ltd (ACN 123 096 819) [2018] FCCA 1431 at [22] per Judge Lucev.
The Applicants have accepted there is a delay, yet they have provided no explanation for the delay other than their being a “bevy of claims” that took some time to develop. As was indicated, the matter had been on foot for over two years and had been listed for hearing since 3 March 2017. While the Court accepts the claims relied upon the evidence already filed and that there would be no need for the matter to be adjourned this was still considered to be unsatisfactory, particularly where the Applicants had not provided any amended grounds to support the Amended Proposed Orders. Given the length of time that the Applicants have had to identify the issues and cause of action, 2 years since the filing and 17 months since the matter was listed for hearing, that the Applicants had not acted within the ample opportunity they had and with no explanation, and the Court finds that this weighs against the new claims being raised: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu [2015] FCA 1098 at [90] and [127] per Gleeson J (“Tamaya”); Gallagher v BHP Billiton Nickel West Pty Ltd [2016] FCCA 3367 at [23] per Judge Lucev.
The Court observes that the matter had been the subject of eight court events in the eight months prior to the hearing, all for procedural matters. The Applicants raised at one court event in November the possibility of raising new claims and making an amended application, the Court indicated an interlocutory application needed to be filed and made orders programming the matter to an interlocutory hearing in May 2018. The Applicants did not file the application in a case and indicated they would not be pursuing the claims. This was a forensic choice of the Applicants, and therefore they “must live with the consequences of that choice”: Tamaya at [127] per Gleeson J.
The Court is required to operate in a manner which resolves proceedings justly, efficiently and economically, uses streamlined procedures and avoids undue delay, expense and technicality: FCCA Act, s.3: FCC Rules, r.1.03. In this case those issues weigh heavily against significant last minute amendments in a five day hearing which had been listed some 17 months previously. The prospect of such a hearing going off, either completely or in part, or being part heard because of the proposed amendments, was likely to cause great difficulty, especially where the case load in the Perth Registry of this Court over several years was described in November 2017 by the Federal Court as “extreme”, and the judicial resourcing of the Perth Registry of this Court was described by the Federal Court as “under resourced”: WZASX v Minister for Immigration & Border Protection [2017] FCA 1415 at [32] per McKerracher J, with all of the case management, and other, consequences and effects both obvious and not obvious that flow therefrom. The seemingly somewhat chaotic state of the Applicants’ case two years after it was filed, and on the opening day of the hearing, caused the Court to consider that the prospect of further significant delay was a very real prospect if the amendments were granted.
A critical factor in the Court refusing leave to raise the new claims was the prejudice to Halliburton. The addendum to the submissions which the Proposed Amended Orders was incomplete, and as far as placing Halliburton on notice of the case it was required to meet a party to litigation has the right to know what the case is that they have to meet: Kioa v West [1985] HCA 81; (1985) 159 CLR 550; (1985) 60 ALJR 113; (1985) 62 ALR 321 at 582 per Mason J and 632 per Brennan J. Halliburton would be prejudiced if the Court allowed the Applicants to raise these claims at such a late stage, particularly where there has been no particulars or grounds and the matter was to be heard over the coming 5 days.
The Court notes that in Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574; (2008) 176 IR 245 at [28] per Tamberlin, Gyles and Gilmour JJ observed that in light of s.570 of the FW Act which limits costs being awarded to prescribed circumstances the ability of an adverse costs order remediating any prejudice should be given weight. For that reason the Court made the following order adverting to costs on 7 August 2018:
2. Costs of the amendments and the adjournment to 9.30am on 7 August 2018, if any, be reserved.
In the circumstances and for the reasons incorporated above the factors weighed against the Applicants being granted leave to rely upon new grounds that arose from orders 11 and 13 of the Proposed Amended Orders. It is trite to note the Court also indicated that it would not entertain any superannuation claims as it has not been mentioned in any material before the Court. On that basis the Court refused to allow the major new amendments, the hearing proceeded on the basis of the following Proposed Amended Orders sought were the Applicants to be successful:
1. A declaration that the Respondent contravened s.44 of the Fair Work Act 2009 (Cth) (Act) when it failed to pay the Applicants in accordance with:
a) s.90(1) of the Act (payment for annual leave taken); and
b) s.90(2) of the Act (payment on termination of employment for accrued untaken annual leave), by not paying a rate of pay (the Applicants' base rate of pay) that included an operating day rate (the ODR) for 84 hours per week (the ordinary hours of work).
2. A declaration that the Respondent contravened s.44 of the Act in that it failed to comply with s.87(2) of the Act, when it failed to accrue the Applicants’ entitlement as continuous shiftworkers under s.87(3) of the Act to five weeks of paid annual leave for each year of continuous service.
3. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.90(2) of the Act (payment on termination of employment for accrued annual leave) their entitlement as continuous shiftworkers under s.87(3) of the Act to five weeks of paid annual leave for each year of continuous service.
4. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.117(2)(b) of the Act (payment in lieu of notice of termination) their full rate of pay for the ordinary hours of work by not paying an amount that included all payments including, but not limited to, the ODR.
5. A declaration that the Respondent contravened s.44 of the Act when it failed to pay to the Applicants in accordance with s.119(2) of the Act (redundancy payments) the Applicants' base rate of pay by not paying a rate of pay that included the ODR.
6. A declaration that the Applicant Fook-Seng (George) Fong (Fong) was entitled to accrue an entitlement under s.90(1) of the Act to paid annual leave for the period July 2010 to January 2011 according to the ordinary hours of work.
7. A declaration that Fong was entitled to be paid in accordance with s.90(2) of the Act on termination of his employment for the annual leave accrued during the period July 2010 to January 2011.
8. That a pecuniary penalty be imposed on the Respondent in respect of each of the contraventions of the Act referred to above.
9. That the Respondent pay to the Applicants compensation for their loss suffered by reason of the Respondent's contraventions as specified above and as particularised in the Applicants’ Revised Addendum to Outline of Submissions (Revised Addendum).
10. That the Respondent pay Fong and the Applicant Jamie Christian Albanis (Albanis) damages for breach of their contracts of employment when it failed to reimburse them for income tax payments on income earned by them outside Australia.
12. In the alternative to order 11 above, that the Respondent pay compensation to the Applicants listed in order 11 above, for not complying with the Long Service Leave Act 1958 (WA) when it failed to take into account the ODR in calculating payment for their entitlement on termination of employment to long service leave.
14. That the Respondent pay to the Applicants interest on the compensation and damages claimed above as particularised in the Revised Addendum.
15. That the Court makes any further orders in favour of the Applicants as the Court deems fit.
On the basis that appropriate orders were made on 7 August 2018 in respect of the Proposed Amended Orders no further orders are now necessary in this regard.
Overview
The claims can be categorised into five issues:
a)a continuous shift worker claim premised on s.87(3) of the FW Act and arguing that Halliburton contravened the National Employment Standard (“NES”) when it failed to accrue the Applicants’ leave on the basis that they were entitled to five weeks per year as continuous shift workers by virtue of s.87(3)(a) of the FW Act (“Annual Leave Claim”);
b)a claim by Mr Fong that he was entitled to accumulate leave for when he worked under the International Commuter Assignment Policy (“ICAP”), such claim limited to the time he spent in Indonesia and based upon ss.22(1), 35(1)(a) and(b) and 87(2) of the FW Act (“Mr Fong’s Claim”);
c)the NES claims where it is contended that Halliburton failed to include the operating day rate (“ODR”) in (“NES Claims”):
i)annual leave under s.90(1) of the FW Act;
ii)payment of accrued annual leave on termination of employment pursuant to s.90(2) of the FW Act;
iii)payment in lieu of notice pursuant to s.117(2)(b) of the FW Act; and
iv)redundancy pay pursuant to s.119(2) of the FW Act;
d)the damages claim of Mr Fong and Mr Albanis concerning Halliburton’s tax policy for overseas income that they earned which it is claimed, by the policy and their contract of employment, they were not reimbursed for income tax as they should have been for the income tax so paid (“Tax Claim”); and
e)a claim of Mr Fong, Mr Albanis and Mr Conway concerning long service leave entitlements claim being that they were entitled to long service leave under the LSL Act WA which should have taken into account the ODR when they were paid out for their long service leave, or which required that the ODR be taken into account (“Long Service Leave Claim”).
The Applicants seek declarations for contraventions of the NES by Halliburton based on the powers in s.545(1) of the FW Act and s.16 of the FCCA Act, that pecuniary penalties be imposed upon the respondent for contraventions of the NES pursuant to s.546(1) of the FW Act and that those penalties be made payable to the Applicants pursuant to s.546(3)(c) of the FW Act, compensation for the loss and damage suffered resulting from any contraventions of the NES pursuant to s.545(2)(b) of the FW Act, and compensation in respect of the long service leave claim pursuant to s.545(2) of the FW Act.
Evidence and other matters
At hearing the following affidavits of the Applicants were read:
a)affidavit of Aarron Leng Kee affirmed 5 July 2016 save for paras.[29]-[55] inclusive that were not read or relied upon (“Kee Affidavit”);
b)affidavit of Franlin (Franklin) (James Anthony) Lopez affirmed 12 April 2016 save for paras.[42]-[49] inclusive that were not read or relied upon (“Lopez Affidavit”);
c)affidavit of Peter Regan affirmed 27 June 2016 save for paras.[54]-[105] and [116]-[119] inclusive that were not read or relied upon (“Regan Affidavit”);
d)affidavit of Fook Seng (George) Fong affirmed 27 June 2016 save for paras.[94]-[149] inclusive and [158]-[165] inclusive that were not read or relied upon;
e)affidavit of Jamie Christian Albanis affirmed 6 June 2016 save for paras.[59]-[115] inclusive, [119],[120] inclusive, [124] and [125] that were not read or relied upon; and
f)affidavit of Jeffrey Craig Conway affirmed 30 May 2016 save for paras.[50]-[66] inclusive, [70]-[71] inclusive, [75]-[78] inclusive and [80] that were not read or relied upon.
Halliburton read the following affidavits:
a)affidavit of Linda Easter (“Ms Easter”) affirmed 30 June 2017 save for paras.[67]-[71] inclusive, [95]-[157] inclusive, [159]-[172] inclusive, [442]-[460] inclusive and [514]-[520] inclusive that were not read or relied upon. Ms Easter made corrections to the following paras.[72], [75], [244], [286], [352], [479], [480], [706] and [709] (“Easter Affidavit”);
b)affidavit of Michael Francis Laurance (“Mr Laurance”) affirmed 23 November 2017 (“Laurance Affidavit”);
c)affidavit of Leo Jilan Blawan (“Mr Blawan”) affirmed 29 June 2017 save for paras.[30]-[91] inclusive, [237]-[256] inclusive and [278]-[282] inclusive not being read or relied upon (“Blawan Affidavit”);
d)affidavit of Julian Krawec (“Mr Krawec”) sworn 14 September 2017 save for paras.[49]-[176] inclusive, [204]-[229] inclusive and [243]-[250] inclusive not being read o relied upon (“Krawec Affidavit”); and
e)affidavit of Timothy Shawn Oborne (“Mr Oborne”) affirmed 28 November 2017 save for paras.[44]-[99] inclusive, [147]-[156] inclusive and [207]-[212] inclusive that were not read or relied upon (“Oborne Affidavit”).
In relation to the Easter Affidavit, Counsel for the Applicants indicated that on its face there was a large portions of argument, hearsay, an attempt to give unqualified legal opinion and an attempt to characterise various things, such as, what is a bonus, what are ordinary hours of work that were issues before the Court to determine in the present proceedings, and the Applicants objected to this formally going into evidence but wished to await closing submissions of Halliburton to determine what to make of the evidence: Transcript, p.166 at [17]-[27]. The Court expressed apprehension about admitting the Easter Affidavit into evidence without the Applicants putting forward the objections and suggested it would be appropriate the parties confer and return with the outstanding objections that the Court can then determine so as not to reach a stage where in the final throes of the hearing an issue then arises as to whether certain parts of the Easter Affidavit were admissible. Counsel for the Applicants indicated no objection was taken if the Easter Affidavit was not relied upon as the truth of the characterisation of a bonus or other issues that are for determination by the Court, and Senior Counsel for Halliburton accepted this and noted in closing submissions what was relied upon by Halliburton would be made clear, and most if not all portions of the Easter Affidavit that were taken issue with would not be relied upon. Both parties indicated the preferred course was for the Easter Affidavit to be provisionally admitted into evidence subject to the Applicants having a right to raise an objection if it appears a matter is being relied upon unduly, and the Court noted that in circumstances where Counsel and Senior Counsel were both well-experienced it would cede to this request. The Court notes that no objection was raised further in the course of the hearing by the Applicants and this indicates that those preliminary views as to the objectionable nature of some of the Easter Affidavit were not pressed as Halliburton were not relying upon such.
Each deponent was called as a witness and cross-examined. During the hearing the following were marked as Exhibits:
a)an email exchange between Mr Albanis and Halliburton employees commencing with an email sent 12 June 2013 and the last email being sent 11 July 2013 (“Exhibit 1”);
b)an employment agreement dated 27 March 2006 and addressed to Mr Conway and unsigned by Mr Conway (“Exhibit 2”);
c)screenshots of the “My-Pay-Global Compensation” pages of the “HalWorld” intranet (“Exhibit 3”);
d)the Hydrocarbons Industry (Upstream) Award 2010 (“HI Award”) (“Exhibit 4”); and
e)the Halliburton Australia and New Zealand Employee Handbook as at July 2006 (“Exhibit 5”).
During examination of Ms Easter the Applicant’s sought to have an affidavit of Mr Martyn Andrew John Haskell affirmed 22 August 2017 (“Haskell Affidavit”) be put into evidence by Ms Easter and that the Haskell Affidavit “speak for itself”. Ms Easter confirmed she knew Mr Haskell who was a previous employee of Halliburton working as a directional drilling coordinator however she could not recall when he finished his employment with Halliburton. The Haskell Affidavit was filed by Halliburton, however was not relied upon at the hearing and it was indicated that Halliburton did not intend to rely upon the evidence in the Haskell Affidavit nor to call Mr Haskell to give evidence. The Applicants did wish that the Haskell Affidavit be included as part of the body of evidence on behalf of the Applicants, and that they intended that there would be submissions made in relation to the contents. The Court asked if the Applicants wished to call Mr Haskell, and therefore have him cross-examined by Halliburton to which the Applicants responded the alternative was to put the Haskell Affidavit into evidence through Ms Easter, and it was further indicated that the Applicants did not wish to have Ms Easter comment upon the Haskell Affidavit, simply that the content be put into evidence. In circumstances where Ms Easter had not seen or even read the Haskell Affidavit, let alone was not the deponent of the Haskell Affidavit in the Court’s view it would be entirely hearsay and not admissible to which the Applicants did not press the matter any further and the Haskell Affidavit was not read or relied upon.
In relation to this case it is pertinent to note that the Court has read, and re-read significant portions of each of the following:
a)the pleadings;
b)each of the affidavits;
c)the transcript of the five days of hearing;
d)the exhibits; and
e)the parties written submissions.
These Reasons for Judgment are being delivered, by video-link, by Judge Street pursuant to s.75 of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”).
Mr Kee’s Evidence
Mr Kee commenced working with Halliburton in 2008 as a technician, he was then engaged as an Associate Field Professional from 16 July 2012 and on 1 March 2014 was promoted to a Field Engineer: Kee Affidavit, [4], ALK1, ALK2, ALK3. In examination Mr Kee indicated he had one further promotion in which his job classification did not change however his pay band and the level of engineering were one level higher. The work Mr Kee carried out was in the Halliburton workshop or on site within Australia carrying our work on a “rig” and both were carried out in the same nature as to provide services for the oil and gas industry: Transcript, p.50 at [31]-[32]. There were slight differences in the work Mr Kee undertook in the workshop and on the rig, and when in the workshop he undertook building, repair and maintenance of drilling systems and was paid at a reduced ODR rate: Kee Affidavit, [13].
Mr Kee referred to the ODR being a “significant component” of his pay, and clarified that in saying this he was referring to the ODR as being additional amounts that he received on top of his base salary: Kee Affidavit, [12]; Transcript, p.50 at [41]-[42]. Mr Kee worked shifts of 12 hours length, seven days a week for what he originally stated was a “four, five, six weeks” swing, though three to four weeks was the usual swing. When Mr Kee was not working he would be at home on a retainer and be “on call” so would always have his phone with him and be checking emails every day as he may be called to go into work at any time: Kee Affidavit at [16] and [23]-[27].
Mr Kee confirmed that when taking annual leave he was paid at his base salary rate, he was paid his base salary every month and bonuses, which were recorded on a “bonus request form” which Mr Kee said was part of the timesheets that were required to be filled out and the ODR component were paid one month in arrears. During cross-examination Senior Counsel for Halliburton referred to Annexures LE-39 and LE-40 of the Easter Affidavit being the timesheets and payslips of each of the Applicants respectively. The following evidence was given by Mr Kee in cross-examination:
a)in August 2012 Mr Kee was engaged in five days of training and seminars, two days of travel and had “days off” for the remainder of the month: Easter Affidavit, LE-39, p.933, and when compared to the payslip of September 2012 Mr Kee was paid at his “retainer” or base salary and no ODR was paid: Easter Affidavit, LE-40, p.1148;
b)from 1 January 2013 to 31 January 2013 Mr Kee worked 16 days “onshore” and the remainder were “days off”: Easter Affidavit, LE-39, p.938 and when comparing with the February 2013 payslip Mr Kee was paid his base salary and 15 ODR units: Easter Affidavit, LE-40, p.1153
c)when asked why there may be one less ODR unit then there was days worked Mr Kee stated that it could have been between the pay periods, so whichever days up to that point for that pay period were paid and the additional would have been carried over to the next pay form, however Mr Kee when referring to the March 2013 payslip indicated that that was not the case and stated “And so the other explanation is that there are half ODRs”: Transcript, p.55 at [5]-[14];
d)where Mr Kee was working in the workshop to help the technicians out he was paid half ODR and he was not paid ODR when undertaking training (confirmed by Easter Affidavit, LE-39 p.940 and LE-40, p.1156);
e)in July 2013 Mr Kee worked from 16 days: Easter Affidavit, LE-39 p.943 and the corresponding ODR was 15.5 units: Easter Affidavit, LE-40 p.1159 which Mr Kee explained as one of two alternatives; a half ODR for one day or a sensor bonus: Transcript, p.56 at [4]-[5];
f)in September 2013 and January 2014 Mr Kee was paid a half ODR less than the days he worked which he believed that was because it when we there was a “crew change” and he we would have to come in for a certain period of “non-productive time” on the rig while waiting for another engineer to arrive and for that he was paid a half ODR: Transcript p.56 at [23]-[27];
g)in June 2014 Mr Kee worked three days but was paid no ODR, and when asked why this would be Mr Kee stated he should have been paid half ODR for these days as it was a mutual agreement between the managers at the time that was also submitted on the monthly timesheets. Mr Kee was then asked if it was up to the company whether he got ODR or not when in the workshop to which he responded affirmatively, although it was agreed he would be paid for the time he was in the workshop: Easter Affidavit, LE-39 p.954 and LE-40, p.1173; Transcript p.57 at [6]-[7];
h)when put to Mr Kee that there were days in the workshop when he was not paid ODR he responded that there was not, and was directed to the month of July where he was paid for 10 days of onshore work in the workshop and he was not paid ODR which he confirmed was what was reflected in the payslip, but he maintained he was correct to state he was paid half ODR in the workshop as this was agreed, not written into his contract but possibly through email correspondence: Easter Affidavit, LE-39 p.954-955 and LE-40, p.1174; Transcript p.57 at [42]-[45] and p.58 at [1]-[2];
i)in July 2014, the month Mr Kee worked 10 days and was paid no ODR. The amount of the half ODR Mr Kee would have been paid over those 10 days was $1,760. He made no complaint and stated it “obviously slipped me”, just as he had not realised the previous month, and again in September 2014 when he was paid no ODR having worked six days in the month: Transcript, p.58; Easter Affidavit, LE-39 p.956 and LE-40, p.1177;
j)the last “working day” of Mr Kee was 15 February 2015, he was paid at his annual base salary for three months until he was advised that his employment ended on 11 May 2015, however during February and May 2015 he made contact with Mr Oborne who he was aware had attempted to obtain work for Mr Kee and another engineer in April and May 2015 in Oman but was unsuccessful and Mr Kee sent out various emails to colleagues trying to obtain work; Kee Affidavit at [27]; Transcript, p.60 at [8]-[9]; and
k)to Mr Kee’s knowledge and recollection there was no time he was not paid ODR for the time that he worked on the rig: Transcript, p.62 at [3]-[4].
Mr Lopez’s Evidence
Mr Lopez commenced employment with Halliburton in March 2007 as a Direction Drilling Field Professional, or a Directional Driller: Lopez Affidavit, [6], Annex.FL1. When working on or around the rig Mr Lopez was paid an ODR and when not he was paid at his base salary rate. However he would remain on call and would have to return to work on short notice including when on annual leave, an example being his having to return from a family holiday: Lopez Affidavit, [14]-[19]. The nature of the job was that if Mr Lopez was on call and told he was needed elsewhere as a result of client requirements then he would go: Transcript, p.72 at [29]-[38]. The hours Mr Lopez were worked were scheduled as 12 hours, yet this did not include the half hour period prior to and subsequent to the shift for handover, and often additional hours required for operational reasons which extended a shift to 16 hours: Lopez Affidavit, [22]-[26].
In July 2013 Mr Lopez attended a meeting where he was provided a schedule stating he would receive a $36,107.44 severance payment from Halliburton: Lopez Affidavit, Annex.FL3. Mr Lopez was advised in August 2013 that an error had been made and he would be required to repay $11,473.59 to Halliburton, a sum he confirmed was paid in full: Lopez Affidavit, [54]-[58]. Mr Lopez also provided oral evidence at the hearing and was cross-examined, and the substance of that evidence is as follows:
a)Mr Lopez’s work involved drilling wells, getting tools ready, making up BHAs, liaising with the company man about the job that is upcoming, getting tools ordered, and preparing end of well reports. Every day he was on the rig for 12 hours a day or more, despite an employment agreement signed 7 November 2006 stating 40 hours per week Mr Lopez stated he worked 84 hours a week and he assumed the employment agreement reflected that as that is what occurs on the rig: Transcript, p.65-66;
b)on most occasions Mr Lopez will get paid a full ODR, even on travel days and in situations where he did not he “made noise” about it, though toward the end of his employment he was paid a half ODR on occasions. On training days or the few occasions he was in the workshop he could not recall if he was paid ODR: Transcript, p.68-69 at [6]-[24];
c)in April 2011 Mr Lopez worked two days and was paid one and a half ODR which he stated may have been as when he worked in Roma, Queensland if he was in the “staff house” he was paid only a half day ODR: Easter Affidavit, LE-39 p.983 and LE-40, p.1379; Transcript, p.69 at [14]-[16];
d)in March 2012 Mr Lopez had one day of travel and eight days of standby while the rest of the month was “days off” and he was paid just 4 days of ODR, however, received a “hardship premium” as this was outside Australia: Easter Affidavit, LE-39 p.991 and LE-40, p.1393;
e)in May 2012 Mr Lopez worked 15 days offshore and had one day of travel amounting to 15.5 ODR units suggesting a half ODR was paid for the day of travel and in January 2013 there were 15 days of work and 14.5 units of ODR suggesting the final day was likely a “crew change” day: Easter Affidavit, LE-39 p.992-993 and 999 and LE-40, p.1396 and 1404;
f)in February 2013 Mr Lopez had one day of training, 19 days of onshore work and a day of travel afterwards, and was paid 18.5 ODR units suggesting Mr Lopez did not get ODR on the training day, the travel day and a half ODR on one of the onshore days: Easter Affidavit, LE-39 p.999-1000 and LE-40, p.1405;
g)in June 2013 for 17 days of onshore work Mr Lopez was paid 14.5 ODR units and the following month he was onshore for 8 days and received 7.5 ODR units. Mr Lopez explained that he simply put his work into the timesheets and did not know how it was worked out, he just takes a salary: Easter Affidavit, LE-39 p.1001-1002 and LE-40, p.1440; Transcript, p.72 at [11]-[14]; and
h)handover would occur at 6am and at 6pm, at the beginning or end of the shift for the respective driller, and sometimes would take half an hour if there were issues or could take a longer time if there were any failures: Lopez Affidavit at [23].
Mr Regan’s Evidence
Mr Regan was initially engaged with the United States arm of Halliburton Company, and on 16 December 2010 Mr Regan was transferred and commenced employment as a Field Engineer: Regan Affidavit, [2], Annex.PR5. Mr Regan predominantly did work in northern Western Australia and Queensland, but was also called to work overseas in Papua New Guinea, New Zealand and West Africa on occasion under the Halliburton’s international short term assignment policy: Regan Affidavit, [24]-[25], Annex.PR12. Mr Regan worked for a period of three months in 2014 in the Perth office and the office of a client, while also undertaking office duties for approximately 1-2 months each year in 2012 and 2013, on each occasion receiving base salary and ODR: Regan Affidavit, [34]-[35]. On all other occasions Mr Regan was onsite on a rig where he was paid bonuses in addition to his base salary and his ODR.
The notional hours of work stated in Mr Regan’s unsigned employment agreement was 84 hours: Regan Affidavit, Annex.PR8. When on a rig, being the 7-8 swings each year, Mr Regan would be scheduled to work 12 hour shifts however this would often be longer, and he would do swings of 24 to 28 days, and on 3-4 occasions he worked 16-18 hour shifts, on one or two occasions he worked 24 hours straight, while also being awake for up to 36 hours when he commenced work on a rig immediately upon arriving: Regan Affidavit at [42]-[51]. Mr Regan states he was expected to work a 12-hour shift when on a rig and did so every day he was on the rig, and those times when he was not on a rig and “on call” there was no certainty in how long he would remain on call and it varied between swings: Transcript, p.76 at [34]-[45] and p.77 at [1]-[4].
Mr Regan also provided oral evidence at hearing as follows:
a)ODR was not paid when Mr Regan was on call, but he was paid ODR when he was doing work for the client, being paid by a client or charged to the client and this work occurred offshore or on a land rig: Transcript, p.76 at [11]-[14];
b)he would take annual leave when he did not want to be sent to a rig, so in effect if he was called to work and did not want to be he was required to take annual leave: Transcript, p.76 at [22]-[26];
c)on 18 April 2011 Mr Regan was rostered to fly out on a helicopter to Karratha, however the company Halliburton were working for at the time, changed their mind because it was decided he was not needed and he was sent back to town, however, he was paid ODR as Apache, the client, paid it: Easter Affidavit, LE-39 p.1014 and LE-40, p.1065; Transcript, p.78 at [28]-[37];
d)in August 2011 Mr Regan worked 16 days offshore and 5 days onshore for which he was paid 20.5 units of ODR and he confirmed that on 21 August he was working in the workshop at Halliburton’s request and he did the five offshore days up in Badgingarra carrying out testing, but it only took half a day in the workshop: Easter Affidavit, LE-39 p.1017-1018 and LE-40, p.1069 Transcript, p.79 at [9]-[13];
e)there was an error in the payslip of October 2011 where Mr Regan was not paid 3 units of ODR from what was recorded on the September 2011 timesheets however this was rectified and reflected in the November 2011 payslip where he received an additional 3 units of ODR: Easter Affidavit, LE-39 p.1017-1018 and LE-40, p.1070-1071;
f)in April 2012 Mr Regan worked 29 days and was paid 28 units of ODR suggesting Mr Regan may have been paid half ODR on some days, however, Mr Regan questioned where the records had come from and noted that it was not unusual for Halliburton’s timesheet records to be incorrect, and quite often he was required to spend some time tallying the payslip to the timesheet to see if things were missing as they were not always correct and if there was something incorrect you would not get a correction as normally it would be something to do with things like training days when you would ask to be paid and you would not get paid: Easter Affidavit, LE-39 p.1025-1026 and LE-40, p.1078; Transcript, p.80 at [10]-[33];
g)Mr Regan was asked if he could have been working in the workshop on 29 and 30 April 2011 as he was classed as “onshore” and therefore he may have been paid half ODR as going on a two day “hitch” was not likely, but Mr Regan said that a two day “hitch” does happen sometimes where a person may be ill however he could not recall what he was doing on those two particular days: Transcript, p.81 at [9]-[17];
h)Mr Regan filled out a bonus request sheet every month and this would be checked by the co-ordinator who would make adjustments if something was incorrect, including where Mr Regan had made a claim for ODR on days where he was training in March 2012. Mr Regan stated he had argued he should have been paid the ODR as there was a charge for that training course that was conducted in the CBD, so there should have been a bonus for that training for those two days which was the reason he claimed the bonus on the timesheet: Easter Affidavit, LE-38 p.684; Transcript at [14]-[19];
i)travel, depending on the client, was not always paid ODR, and specifically travel to and from New Zealand was not paid ODR, and this was a reason many did not like working in New Zealand as it was a full day travel to and from without any ODR payments;
j)Mr Regan undertook eight days of training in June 2012 for which he did not receive any ODR units, however, he was aware of this as he volunteered for this training as it concerned a new tool he wished to be able to use quickly. Later in the month he did five days onshore work at the Halliburton office in Jandakot working on a special project for the Queensland office concerning the paperwork that was required to enable their acquiring of a radiation licence to store radioactive materials in the Halliburton office in Queensland: Transcript, p.83 at [17]-[31];
k)for the five days of onshore work in June 2012 Mr Regan was paid 2.5 ODR, but he did not accept that he was paid half ODR units for days in the workshop or office, rather he stated that he was only working half a day for some of those days as it was left to him as to when he wanted to come in and while he does not remember specifics if he only worked a half day he should have been paid a half day ODR and when he worked a full day he should have been paid the full ODR. When it was put to Mr Regan that it was always a half day ODR for the five days of onshore work Mr Regan undertook in June 2012 he stated that without actually going back into his records he could not recollect, however, the majority of the days that he can remember working in the office, especially if working in the Remote Operating Centre (“ROC”) or doing some kind of special project, it was a full ODR: Transcript, p.84 at [12]-[16] and [26]-[29] and p.88 at [39]-[43];
l)in October 2013 Mr Regan was paid 12 units of ODR for his 12 days of working in New Zealand, was on standby for six days and had “days off” for the remaining days, and he was not paid any ODR for the days he was on “standby”. He stated that this was because it was between two separate jobs for two separate clients, and so upon returning to New Plymouth on 7 October 2013 he had to sit in a hotel because “they wouldn’t let me come home until 14 October when they sent me back to another job”: Easter Affidavit, LE-39 p.1041-1042 and LE-40, p.1095; Transcript, p.85 at [7]-[9];
m)when working in the ROC in January 2014, and presumably previously, a half day rate is accrued on the day when one arrives as it is similar to a “crew change” where the employee that coming to the end of the hitch works half of the shift and the relief, Mr Regan, comes on and does the other half to assist the ease into working night shift and while the timesheet will state an individual worked 12 hours, it was Mr Regan’s evidence that it would have been somewhere between six and eight hours “probably”: Easter Affidavit, LE-39 p.1045 and LE-40, p.1099; Transcript, p.85 at [17]-[28]. Mr Regan then recanted and stated he was incorrect as the time in question, being January 2014 when he was not working Saturdays and Sundays it would be the time he was working in the office as a coordinator and the half ODR reflected his having a half day off because he did not feel very well: Transcript, p.85 at [33]-[35];
n)from 3 November 2014 to 26 February 2015, four months (as opposed to three months Mr Regan affirmed at [34] of his affidavit), and Mr Regan was paid for “Regular Work” which was recorded as being 8 hours per day on a Monday-Friday basis. During this time Mr Regan was working for Chevron Australia: Regan Affidavit at [34], Easter Affidavit, LE-39 at p.1054-1057;
o)on a regular handover (not one undertaken on the first day of the swing) an employee was expected to be there somewhere between at least an hour to half an hour before the shift started, and at some rigs there would be mandatory safety meetings that an employee had to go to beforehand, and was therefore required to arrive even earlier to go to the safety meeting before going to see the employee’s “back to back” and briefing them or get briefed: Transcript, p.87 at [39]-[43];
p)within six months of being made redundant the Jandakot workshop was shut down and when put to him that the Jandakot workshop was shut down by the end of June 2014 Mr Regan could not dispute this: Transcript, p.88;
q)when working for Chevron temporarily Mr Regan was responsible for running a third drilling rig that Chevron had required some engineers to cover for the six months or eight months they expected to be running the third rig, and Halliburton were paid by Chevron for Mr Regan working for them though Mr Regan had no variation in his employment agreement while he was contracted to Chevron: Transcript, p.89; and
r)the purpose of filling in bonus request forms and the timesheet was to keep a track on which days one had worked and which days one was at home because to Mr Regan’s knowledge Halliburton would charge the client for when an employee was on the rig, including the ODR: Transcript, p.90 at [29]-[44].
Mr Fong’s Evidence
Mr Fong had been engaged by Halliburton, and the predecessor company which Halliburton acquired, since 1995, and his most recent employment agreement was dated 23 December 2010: Fong Affidavit at [4], [12] and Annex.FSF1. Mr Fong was employed as a Field Engineer at the time of his termination and had worked solely internationally for a number of years under the “ICAP” from January 2001 to January 2011, and the International Short Term Assignment Policy (“ISTA”) from February 2011 until March 2015: Fong Affidavit, [27]-[28], Annex.FSF4 and FSF5. Mr Fong said he went to work for the ODR: Fong Affidavit at [49].
Mr Fong worked a minimum of 14 hours a day and could often work 16-18 hours per day when on a swing, the length of the swing itself was not consistent and was varied in duration, however, Mr Fong would usually work for about six weeks at a time: Fong Affidavit at [65]-[66] and [72]. He did so whether he was on a rig, or in the office at the ROC: Transcript, p.98 at [30]-[44] and p.99 at [1]-[14]. Mr Fong did not recall ever being credited with a pro-rata share of annual leave on completion of an international assignment as was specified in cl.7.1 of the ICAP: Fong Affidavit, [74]-[77]. The substance of Mr Fong’s oral evidence provided at hearing when cross-examined is as follows:
a)when working in Indonesia pursuant to an ICAP from July 2010 to January 2011 Mr Fong worked a rotation of 45 days on and 30 days off, the latter he referred to as his “field break”, however, his field break would often be interrupted due to operational requirements that required he return to the rig and as far as he was concerned he was to be ready, willing and able to return: Transcript, p.96-97;
b)the ISTA is the short term, on loan engineer work that Mr Fong would do, there are times that he will go overseas to perform work for respective districts due to the fact that he will be needed in certain countries due to his specific expertise and this work would be an assignment, it would be not regular and he would not do a rotation of 45 days on and 30 days off rather he would complete an assignment that he was sent to do: Transcript, p.97 at [33]-[46]; the ICAP has a fixed schedule where Mr Fong knows the number of “days off”. When in Indonesia in the period July 2010 to January 2011 he had 30 days, an unbroken period, of days off and he confirmed that where he said there were numerous occasions due to operational requirements when his field break was interrupted he was referring to being on an ICAP: Transcript, p.100 at [5]-[17];
c)from 1 July 2010 until 31 December 2010 Mr Fong worked a fixed rotation schedule in which there were no interruptions to his continuous field breaks: Easter Affidavit, LE-39 p.831-835;
d)the ICAP annexed to Mr Fong’s Affidavit at FSF5 dated 1 April 2003 was replaced by a later ICAP signed by Mr Fong on 8 September 2009 (effective from 1 July 2009) that was annexed to the Easter Affidavit, LE-34 p.538 and when this was put to Mr Fong he accepted that it must have been the most recent ICAP and as he has signed it he must have seen it previously. A further update ICAP dated 16 September 2010 was put to Mr Fong who did not recall if he had received this but agreed it would supplant FSF5 and the ICAP if applicable: Transcript, p.102 at [9]-[46] and p.103 at [19]-[27];
e)when Mr Fong is on a rig he will get paid a full day rate, when he is on standby (for example where an individual is on a rig but has to leave the rig because of bad weather or a fire and a standby allowance is paid for the worker to remain in close proximity to return to the rig straightaway) he is paid a portion of the ODR, when he is on a field break he will not be paid ODR, on some travel days there was no ODR paid and on crew change days he was paid a half ODR rate: Transcript, p.109 at [21]-[46] and p.110 at [5]-[9];
f)when Mr Fong is injured (or cannot be working, referred to at [54] of the Fong Affidavit as “personal leave”), he would be paid 75 percent of the ODR by virtue of an insurance policy taken out for Mr Fong by Halliburton for circumstances where he may become ill and not pursuant to any statutory workers compensation rights: Transcript, p.110 at [11]-[38];
g)the handover period would generally occur at approximately 5.30 to 6 o’clock where the working schedule was 6am to 6pm and 6pm to 6am: Fong Affidavit, [65]-[67]; Transcript, p.110 at [43]-[47];
h)Mr Fong was aware the ICAP stated that “Rostered field breaks provided under this contract compensate a number of factors including holiday breaks and no additional annual leave or vacation provisions apply” and he did question them but was told that this is what Halliburton have always done for all employees working under that ICAP, and he was none the wiser as to what the requirements were and just followed the rules acknowledging that he knew that was how Halliburton was going to act, and he agreed to those terms and conditions when signing the ICAP: Easter Affidavit, LE-34, p.543; Transcript, p.111 at [10]-[27];
i)Mr Fong last “worked” on 8 March 2015 and was “terminated” on 11 May 2015, and in the interim period he took a period of annual leave and was scheduled to go overseas but there was a postponement of the job, and during that time he was paid at his base rate salary: Easter Affidavit, LE-39, p.884-886; Transcript, p.112 at [1]-[11];
j)Mr Fong had no indication that he was going to be terminated upon finishing on 8 March 2015 and he was asked by the supervisor to return to the United Kingdom during his period of annual leave which he declined and thought he would simply be going back there upon returning from his annual leave and upon being made redundant he made some attempts to try to find other work but was unsuccessful: Fong Affidavit, [103]; Transcript, p.112 at [33]-[47] and p.113 at [1]-[3]; and
k)there was never a “roster” or “schedule” for when one was required to go to work on a rig rather one would just wait for a call or have an “inkling” based on previous discussions: Transcript, p.112 at [22]-[28] and p.113 at [7]-[12].
Mr Albanis’ Evidence
Mr Albanis was a Field Engineer having been promoted a number of times since commencing with Halliburton in January 2007 as a graduate: Albanis Affidavit at [2]-[6]. Mr Albanis undertook a significant amount of work in New Zealand under the ISTA policy from 2012: Albanis Affidavit at [15]-[22], Annex. JCA3. Mr Albanis saw the ODR as a main component of his pay: Albanis Affidavit at [23]. While Mr Albanis was scheduled to work 12 hour shifts he would work longer to accommodate a handover period of approximately half an hour and on one to two occasions per swing would be required to work in excess of 16 hours as the nature of the work made it impossible to forecast when work would be scheduled: Albanis Affidavit at [43]-[47]. Mr Albanis was terminated effective from 13 May 2015: Albanis Affidavit at [121].
Mr Albanis’ oral evidence was as follows:
a)at [33] of the Albanis Affidavit it states that just prior to termination Mr Albanis had ordinary time earnings of $611.23 a day which he believes he worked out by taking his total income for the year and dividing it by 365: Transcript, p.118 at [46]-[47];
b)in July 2010 Mr Albanis was paid ODR for travel, in October 2010 he was not paid ODR for travel or training, in November 2010 Mr Albanis worked 11 days offshore, 1 day onshore and had one training day for which he was paid 11.5 ODR units, in April 2011 Mr Albanis worked 12 days offshore and 4 days onshore for which he received 14 units of ODR and it was accepted that he was paid a half ODR unit for the onshore day of work: Easter Affidavit, LE-39 p.709, 711, 713 and 718 and LE-40 p.1304, 1306, 1309 and 1314; Transcript, p.120 at [23]-[30];
c)Mr Albanis accepted that there were days on which he would not get paid ODR for travel as he stated that it was dependent upon the client: Transcript, p.121 at [23]-[24], and when Senior Counsel for Halliburton referred to a number of instances where it appears he was not paid ODR for his travel and training days Mr Albanis accepted this without needing to refer to the payslips or timesheets: Transcript, p.122 at [9]-[34], while also confirming that a crew change day will result in a half unit of ODR as opposed to a full unit ODR: Transcript, p.122 at [36]-[40];
d)when put to Mr Albanis that at [36] of the Albanis Affidavit he stated he was “frequently at work” yet in the years 2010-2014 inclusive he worked an average of 156 days a year, he accepted that was “probably fair”: Transcript, p.122 at [45]-[46];
e)at [36] of the Albanis Affidavit it was stated that the longest period Mr Albanis was not at work but not on leave was a six-week period in about early 2008, and when he was referred to the Easter Affidavit, LE-39 p.752-753 showing Mr Albanis had a period of seven weeks off between 15 May 2014 and 2 July 2014 he said he must have forgot about when preparing his affidavit: Transcript, p.122 at [11]-[17];
f)the handover period usually occurred between 5.30 and 6 o’clock on the 12 hour shifts: Transcript, p.12 at [23]-[26]; and
g)Mr Albanis was twice asked if he accepted that the ODR was paid to compensate for working long hours, or hours beyond 38 hours per week, to which he replied on both occasions that the ODR was paid to Mr Albanis to work: Transcript, p.123 at [40]-[43] and p.124 at [11]-[13].
Mr Conway’s Evidence
Mr Conway was engaged as a Directional Driller by Halliburton in May 2006: Conway Affidavit at [3]. It was Mr Conway’s understanding, and his specific requests that he be paid a half ODR for travel until the time he reached the “embarkation point” (the airport close to the rig or the work site) from which point he would receive the full ODR, that he be paid the ODR when called in for meetings at the office and he paid at a minimum half ODR when he was on “standby”: Conway Affidavit at [14]-[19]. Mr Conway worked under an ISTA when undertaking work overseas: Conway Affidavit at [38]. Mr Conway would often be scheduled to work a 12 hour shift from 6.00am to 6.00pm however his day would often start at 4.00am with a meeting with a company representative followed by a general meeting with other personnel at 5.30am before the shift would commence at 6.00am and then from 6.00pm there would be a half hour handover period followed by a meeting with the rig operator from 6.30pm-7.00pm: Conway Affidavit at [42]-[44].
Mr Conway’s employment with Halliburton ended on 18 July 2013: Conway Affidavit, Annex.JCC7.
Mr Conway’s oral evidence was as follows:
a)annexure JCC1 to Mr Conway’s Affidavit was a copy of a draft employment agreement sent to Mr Conway by post from Australia when he was still living in the United Kingdom but on the bottom of that employment agreement, in the footer, it reads “Employment Agreement-Phillipe Grandjean” and the date below the signature block reads 23 July 2015 despite it seemingly being asked to be returned by 9 April 2006. Mr Conway could offer no explanation for this, and said he would have been sent this agreement around April 2006, and while he had not signed Annex.JCC1 he likely has the signed copy at home: Transcript, p.134 at [1]-[40];
b)Halliburton tendered a copy of Mr Conway’s employment agreement that was signed by an officer of Halliburton on 27 March 2006, however Mr Conway had not signed the document. While there was no material difference in the content of JCC1 and the document tendered by Halliburton (marked as Exhibit 2) the footer of Exhibit 2 did state “Employment Agreement Jeff Conway” and Halliburton had dated this 27 March 2006;
c)after 2010 the longest swing Mr Conway was engaged on was for a period of 33 days and at [29] of the Conway Affidavit was not correct as from memory the longest swing would be about seven weeks, as opposed to three to four months, and the longer swings occurred early in Mr Conway’s employment: Transcript, p.136 at [34]-[44];
d)in May 2012 Mr Conway worked four days onshore and was paid only 3.5 units of ODR which Mr Conway explained as being around the time of working on land rigs. As a general rule it meant that if you were on the rig at 6.00am but you were finished with your operation for every other purpose you were at the rig site for that day, except for travel to come back, and the company’s request or the client’s request was that because work was finished at 6am you would not be paid for the full day rate of ODR that day: Easter Affidavit, LE-39 p.805 and LE-40 p.1287; Transcript, p.137 at [12]-[24];
e)in January 2013 Mr Conway was paid 14.5 units of ODR for the 15 days working on a rig, two days of training and one day of travel and in February 2013 Mr Conway was paid 13.5 ODR units for 14 days onshore, which he explained as working in Roma (in Queensland) so the company would pay one day rate so the person whom he was relieving and Mr Conway would split a day rate for the day when Mr Conway took over: Easter Affidavit, LE-39 p.815 and LE-40 p.1295; Transcript, p.138 at [40]-[47] and p.139 at [1]-[3]; and
f)in March 2013 there was 25 days work and one day travel but only 21 units of ODR, Mr Conway suggested the cut-off date was the 20th of the month and the bonus request had to be in for the 20th of that month, so if you worked 25-30 days in January you would put in your bonus request for 20 days and then the next five days was carried over to the next month. When Senior Counsel for Halliburton put to Mr Conway that was not how it worked when one was to look at how other months were calculated, Mr Conway said that he remembered Halliburton were in the process of changing, but whether they did or did not he could not recall, but in light of what was put to him he accepted it, and therefore did not know why he was not paid the full ODR: Easter Affidavit, LE-39 p.817 and LE-40 p.1297; Transcript, p.139 at [7]-[23].
Ms Easter’s Evidence
Ms Easter was the leading witness for Halliburton and the Easter Affidavit comprised some 634 paragraphs and 76 annexures, and ran to a total of 1555 pages. Ms Easter was a Senior Human Resources Generalist with Halliburton until 2012 before being promoted to Human Resources Business Partner in 2014, and at all material times “looked after” the Applicants from a human resources perspective. At [21] of the Easter Affidavit Ms Easter stated that her role involved:
(a) checking employee contracts to ensure the employees are receiving the right amount of compensation and pay for the work performed;
(b) providing support to line management regarding compensation administration and issues;
(c) assisting employees in resolving general human resources, payroll and benefit issues;
(d) coordinating new hire orientations and some training;
(e) frequent contact with employees over the phone and email in respect of employee queries;
(f) providing HR assistance in relation to employees on international assignments, including commuter assignments and short term assignments; and
(g) performing checks on Halliburton and prospective employees coming into the Australasia region to check they have the correct visas and to see whether the employees are eligible for visas;
(h) overseeing maintenance of employee records and reporting in SAP [internal software system which is used by payroll] and other HRIS databases.
Ms Easter’s Affidavit refers in detail to the administrative arrangements and processes Halliburton utilised in the respect of human resources matters including engagement and recruitment, contractual entitlements, employment benefits and compensation and employee relations. This included evidence as to the pay structure including how working hours, bonuses and compensation were derived, Haliburton policies on international assignments, leave entitlements as Halliburton understood them and background to the redundancies the Applicants were subject to in 2015. Most of the evidence in the Easter Affidavit that was relied upon in depth at hearing was the employment contracts located in annexure LE6 and the timesheets and payslips that formed annexures LE39 and LE40. Exhibit 5 supplements annexure LE7 as the employee handbook provided prior to July 2010, that being the employee handbook most of the Applicants should have been provided with upon commencing employment. The Court notes that when Ms Easter was providing evidence, the Court and Ms Easter had not yet been provided with a copy of the 2006 Employment Handbook as it was only during Ms Easter’s examination Halliburton made inquiries about the document being located, and the document was not tendered until after Ms Easter had provided her evidence.
Ms Easter said she explained to Mr Albanis that the ordinary-time earnings was for his base salary” and by that she meant by “ordinary hours” so “ordinary-time earnings” was a reference to superannuation and the ODR was not included in that ordinary hours: Transcript, p.168 at [8]-[12]. Ms Easter was also referred to the following:
a)Mr Lopez’s contract dated 7 November 2006 which had next to the “special conditions” heading written “an offshore bonus of $721 a day will apply by working offshore”: Easter Affidavit, Annex.LE6 p.108;
b)Mr Albanis’ contract dated 19 October 2006 stated “an offshore daily bonus of Group 2 (AUD110.00) and Group 3 (AUD150.00) will apply while working offshore” next to the “special conditions” heading: Easter Affidavit, Annex.LE6 p.120; and
c)Mr Kee’s contract dated 24 July 2012 and Mr Regan’s contract dated 16 December 2010 noted next to the “special conditions” heading that “You may be eligible for certain bonuses or allowances during the course of your work. You can claim these by recording them on your daily timesheet. Please ask your HR representative”: Easter Affidavit, Annex.LE6, p.134 and 150.
Ms Easter stated that bonuses were subject to change given they are variable pay, and the contract templates were likely changed and reflected to refer to the bonus structure: Easter Affidavit, LE6; Transcripts, p.168 at [41]-[47] and p.169 at [1]-[24].
Ms Easter clarified a number of other terms she used in the Easter Affidavit, including:
a)in annex.LE4 of the Easter Affidavit, when using the expression “ordinary time earnings” in an email to Mr Albanis, Ms Easter incorrectly referred to “ordinary time earnings” where she should have referred to “ordinary hours of work” and what she intended to say was “ordinary hours of work”, what she considered Mr Albanis’ work to be was a Drilling engineer working on the offshore rigs and while there were amendments to Mr Albanis’ contract at the time of the email, being 15 May 2015, she believed at the time of the email his job classification was either field professional or senior field professional: Transcript, p.172-173;
b)at [233] of the Easter Affidavit Ms Easter states her understanding was that the variable pay element was paid at the discretion of management for a number reasons she lists at (a)-(f), and when referring to the “variable pay element” she is referencing all the allowances: Transcript, p.191 at [45]-[46];
c)when requesting one week of annual leave what is considered “one week” is Monday to Sunday, and in [472] of the Easter Affidavit Ms Easter provided an example that the software program used to calculate employee entitlements (“SAP”) does so on the basis of an employee working 84 hours across 52 weeks: Transcript, p.178-179;
d)the abbreviation “VPE”, as used in various paragraphs of the Easter Affidavit and also in the job-classification and pay band on the Applicants’ payslips, stands for “Variable Pay Employee” and the “variable pay portion” is the ODR portion, an example being in Mr Lopez’s employment contract the heading that relates to the special conditions and “offshore bonus on group 4”: Transcript, p.186 at [20]-[29]; and
e)the use of the “field break” is a generic term that applies to days off.
In cross-examination the following evidence was provided:
a)where there are changes to the contract template it is usually discussed amongst the Human Resource Team over a period of time and while Ms Easter was not personally involved in the changes to the contract template from memory she can recall speaking with the human resources manager at that time and was told that changes to the “special conditions” contract template were made because the bonuses were subject to change, but she cannot confirm this, and when asked if this was what she “guessed” the reason was she responded in the affirmative: Transcript, p.170 at [44]-[46] and p.171 at [1]-[35];
b)when asked about the argument that ODR was characterised as a bonus she responded that numerous terms can be used and it could be classed as an allowance or a bonus and from her point of view it was a bonus. Having confirmed that when referring to ordinary hours of work Ms Easter was referring to the work Mr Albanis did in the position of senior field professional, Ms Easter then confirmed Mr Albanis was paid ODR when he did a type of work as a senior field professional therefore when he was paid the ODR for doing his work, he was receiving a bonus subject to conditions, those conditions being what was outlined in the variable pay structure found in Annex.LE23 of the Easter Affidavit: Transcript, p.174 at [9]-[37];
c)Halliburton is a services company and charges its clients and earns revenue from certain services performed by people such as the Applicants including duties on an onshore or offshore rig, however Ms Easter could not confirm if the work on the ROC was revenue gathering or if in situations such as where Mr Regan was engaged with Chevron for a period, if Halliburton was paid for the work Mr Regan performed for Chevron although she would assume that was the case: Transcript, p.180 at [6]-[38];
d)Ms Easter did not input the information in LE39, the timesheets, herself, but generated a report directly from SAP and her understanding was that the manual timesheets of LE38 were completed by the applicants and when generating LE39 she did not go through each manual timesheet but downloaded the report from SAP that she assumed to have all the details that were contained in the manual timesheets: Transcript, p.181 at [4]-[47];
e)as Ms Easter could only pull data from a certain date she was required to retrieve archived information from a Mr Catchpole, the payroll manager at the time, who had maintained a spreadsheet that Ms Easter assumed captured all of the material from the manual time sheets, but did not check it personally, therefore if there was a mistake in a time sheet, for example if somebody had not claimed an ODR when they were working on a rig and it was not on the time sheet it would not have been accounted for: Transcript, p.182 at [1]-[25];
f)the SAP had a cut-off date for employees to provide their timesheets and to enable the payroll to happen, the date was towards the beginning to mid-month, employees were paid monthly on the 25th day of each month, but if an employee missed a cut-off date it was open for the employee to make a claim to be processed in the next month: Transcript, p.182 at [27]-[45]. By way of an example, for a payment received on 25 February this would include any ODRs to be claimed from 1 to 31 January, and then the employee’s base salary from 1 to 28 February: Transcript, p.183 at [10]-[14];
g)there was one circumstance where Mr Conway had to repay ODR due to the guidelines in the variable pay structure (Easter Affidavit, at [269]) but to the best of Ms Easter’s knowledge ODR was paid every time when it was claimed for working on a rig by persons including the Applicants and she believed ODR was paid when it was claimed every time the Applicants worked in the ROC, however, she had not looked into this “in detail” nor as part of the variable pay structure, but if the Applicants were within the guidelines, they would get paid the ODR: Transcript, p.184 at [1]-[19];
h)to Ms Easter’s knowledge if the Applicants spent a full day travelling, they should not have been eligible for an ODR (eligible for the ODR in the sense that the person must satisfy the circumstances in which the ODR is payable, such as revenue generating duties on a rig), however, if they were on the rig site and attended work that day, they may have been eligible for part or whole ODR and also in circumstances where a client was willing to reimburse Halliburton for ODR, then the ODR might be paid for travelling: Transcript, p.184-185. Further, Ms Easter was not aware of payments such as where Mr Kee was paid a portion of the ODR for working in the workshop: Transcript, p.185 at [22]-[25];
i)the Human Resources team would advise employees prior to commencing employment about the pay band, the variable pay structure, how it relates to the standard salary package and ODR is an additional payment with other bonuses: Transcript, p.186 at [34]-[46] and p.187 at [1]-[11];
j)in the employment agreement of Mr Lopez next to the “Compensation and Allowances Summary” heading it states “Please refer to Section 3: Compensation and Benefits in the Employee Handbook for details” however section 3 of the Employee Handbooks in LE7 of the Easter Affidavit were headed “Health, Safety and Environment” and Ms Easter advised that given Mr Lopez’ contract is dated 2006 there would have been a prior handbook, being what would be tendered at Exhibit 5, for that particular contract and in Ms Easter’s belief there had been some legislation changes in that time period, and therefore some content may well be materially different, but the philosophy would still be the same: Transcript, p.188 at [10]-[34];
k)in Mr Regan’s employment contract dated 16 December 2010 the Compensation and Allowances Summary” heading again states “Please refer to Section 3: Compensation and Benefits in the Employee Handbook for details” however the 2010 Employment Handbook annexed in LE7 was in force at that time, and Ms Easter assumes that a change in the clause to reference the updated 2010 Employment Handbook was overlooked: Transcript, p.189 at [1]-[7];
l)with respect to any changes between the 2006 Employment Handbook (Exhibit 5) and the 2010 Employment Handbook, Ms Easter stated there would have likely been changes with the insurance benefits due to their being renewed annually, possible superannuation changes as there had been legislative changes but “…obviously, general payment [was] still the same”: Transcript, p.189 at [34]-[39];
m)in response to a question from the Court asking if Ms Easter was aware of any changes in terms of the remuneration and benefits provisions in 2010 as a consequence of the enactment of the FW Act Ms Easter was unable to say with certainty that they were changed, but she would think there would have been some: Transcript, p.190 at [14]-[19];
n)the Variable Pay Employee structure documents in LE23 of the Easter Affidavit were approved guidelines for managers to use to implement the bonuses outlined in those structures to the work their employees are doing and were produced from the Global Compensation Group (“GCG”) in Houston Texas, United States: Transcript, p.191 at [27]-[33]. GCG is the group in Halliburton that review and implement compensation and benefits internationally across all departments: Transcript, p.198 at [33]-[45];
o)periods of “on-call” work were uncertain as it was dependent upon the demand for Halliburton to provide services to clients, however the Applicants were required to be fit for duty, including that they could not be under the influence of alcohol: Transcript, p.192 at [3]-[28];
p)when employees were working on a rig, they would accrue annual leave during that period of time by reference to 84 hours per week, when the employees were on-call, they would they accrue annual leave on the basis of 84 hours per week and similarly would do so when working in the ROC, on training and when they were in fact taking annual leave all on the basis of 84 hours per week and when they did actually take annual leave it amounted to the Applicants making themselves unavailable to be on call: Transcript p.192-193;
q)when Mr Fong was on an ICAP, Ms Easter assumed that he would have accrued annual leave during the period of the work rotation on the basis of 84 hours per week, and during the period of a field break Mr Fong would accrue an entitlement to annual leave and it was expected that any annual leave would be taken in the field break: Transcript, p.194 at [1]-[3];
r)Mr Fong was paid his base salary during a field break and when the Court made enquiries as to how Halliburton recorded when an employee took annual leave on a field break Ms Easter stated annual leave was not recorded in the SAP or on an employee payslip, there was just an expectation that annual leave would be taken as part of their field break. Ms Easter confirmed there was no application for annual leave from the employee on a field break, there was no recording of annual leave in the system for the annual leave taken on the field break and there was no deduction of the annual leave days taken, whether nominally or otherwise, on the field break in the SAP, and the employees continued to receive base salary: Transcript, p.194 at [19]-[36]. In re-examination Ms Easter clarified that in respect of the Court’s line of questioning she was referring only to an employee on an ICAP who has a fixed work rotation: Transcript, p.197 at [17]-[27]; and
s)when working in Australia or on an ISTA, the Sperry Group (the subsidiary of Halliburton employing the Applicants) did not have fixed work rotations so annual leave accrued monthly whether the Applicants were on a rig or on a field break, when the Applicants do not want to be “on call” the SAP codes this as annual leave and there will be a deduction from their accrual, however they still continue to accrue annual leave so there is still in effect a record in SAP of accrual and deduction, hence field breaks are simply days off and are not recorded as annual leave: Transcript, p.195 at [1]-[15] and p.198 at [3]-[5].
Mr Laurance’s Evidence
Mr Laurance is the Finance Director of Halliburton and has been since January 2007. Annexed to the Laurance Affidavit were various graphs depicting financial data of Halliburton including gross profit, number of wells and services in operation and breakdowns of work distribution in periods ranging from 2011 to 2016 all generated from SAP: Laurance Affidavit at [33]-[40]. The data and revenue figures were compiled on a calendar year basis as opposed to a financial year basis as this was Halliburton policy in line with the United States parent company, therefore all references are to a full calendar year: Transcript, p.203 at [21]-[32]. The Laurance Affidavit provided a chronology of events and history regarding the business of Halliburton, or more specifically Sperry Drilling, from 2011 to 2015:
a)while business was “not good” in 2011 a profit was still generated: Laurance Affidavit at [52]-[55];
b)service quality issues became an issue in 2012, and Sperry Drilling was disqualified on technical grounds from at least two tenders on capability grounds, however, a decision was made not to exit Sperry Drilling from Australia in the near future despite the issues and to take steps to “right size the business”: Laurance Affidavit at [53]-[78];
c)in 2013 Sperry Drilling lost a contract with Chevron due to service issues and discussions regarding cost saving measures were undertaken, the measures that were adopted decreased the headcount of Sperry Drilling from 90 to 80 employees and as tools were not able to be redeployed Halliburton bore the continuing depreciation costs and leasing costs of the tools: Laurance Affidavit at [79]-[94];
d)in 2014 there was a crash in crude oil price and the major customer of Halliburton, Santos, was crippled by this and revenue from Santos dropped by USD$1.2 million between 2013 and 2014. Further, there was a lack of work booked in 2015 to sustain the size of its operations and further steps were taken to decrease Sperry Drilling's footprint in Australia: Laurance Affidavit at [95]-[119]; and
e)in 2015, the asset base significantly depreciated and it became apparent that revenue was not sufficient to support the current employee headcount, and a decision was made to make employees redundant thereby reducing the headcount from 80 to 20 employees, and then from the third quarter of 2015 Sperry Drilling operated no wells, and had only some minor consultancy work: Laurance Affidavit at [119]-[143].
The Laurance Affidavit refers to “MLT Work” and Mr Laurance noted this stands for “Multilateral Completions Technology” (“MLT”) work and that refers to an installation of products that are used to complete the work after the drilling has occurred and people with specific experience in installing MLT, not those with experience in drilling, are called in to do that work: Transcript, p.202 at [14]-[22]. If Halliburton could not find work for engineers what would happen was they would remain at home and essentially, be a cost to the business as they were still being paid a base rate of pay and Halliburton. Looking forward there was a finite number of rigs that were available and it became apparent there would not be a lot of work going forward. In respect of the process undertaken with respect to the cost saving measures Mr Laurance stated as follows:
COUNSEL: in paragraph 127, you recall a meeting at which you went through a number of things for the purposes you’ve described in paragraph 126 to see where costs could be cut. And one of the things you say in paragraph 127 you went through is each Sperry Drilling’s employee’s name, what they were doing, what they were going to be supporting going forward?... So can you just expand on what you actually did there?
MR LAURANCE: So, essentially, we finalised the – the plan for – or the percentage – the budget for the year towards the end of 14, and we understand the amount of work we’ve got going forward, and we set by cost category of direct expenses, labour, repairs and maintenance, contractors or – or other – other cost line items, and then every month, we go through a forecasting process, and as we got into the start of that first quarter of – of that year, we saw that the plan that we had made and the forward forecast didn’t look like we could support a lot of work, particularly in the second half. There wasn’t – there wasn’t a lot of work available in the second half of the year. And so we thought we needed to, essentially, finish the work that we’re doing now, and we needed to reduce a number of people because we had, essentially, no forward book of work in the second half of the year. And so with that view to go from an exporter of people to a – an importer of people we needed, we suggested that – or the view was taken we would have – Australia would only have enough people to support two active rigs. So Australia would contribute to Australasia or elsewhere. We would only have enough to support two active rigs. So that would be – as I recall, it was three engineers back to back on two rigs. So that’s, essentially, 12 people plus two coordinators, a service planner and a country manager. So… was around 16 people. So that was decided at that time. So we went through the exercise of all the cost categories, people costs, their burden in terms of payroll – payroll taxes and workers compensation and all the other costs that are directly – directly associated with the work to make sure that we only had – we have the smallest footprint we could possible to try and stay – stay profitable and – and the decision was taken to exit the offshore market because that’s – that’s the market share which – which we had lost, and to concentrate on the east coast onshore market. So as a result, we shut down the Jandakot – or the portion of the Jandakot facility that was dedicated for Sperry.
Mr Laurance’s evidence at hearing was as follows:
a)in respect of [145] of his affidavit where Mr Laurance made the comment that “lack of work would have been obvious to the LWD, MWD field engineers and directional drillers due to time and type of work being provided to them by the relevant coordinator”, Mr Laurance confirmed this was an assumption as he could not recall having had a discussion with any of the Applicants about this: Transcript, p.208 at [1]-[19];
b)Halliburton undertook to operate at, and achieve a, break-even level with the new strategy referred to in at [127] of the Laurance Affidavit, the costs Halliburton was carrying at that time included the cost of the base salaries being paid to the engineers and the strategy, was to effectively reduce the head count for Sperry Drilling so that it ran with less people aligned with the very limited amount of work that was anticipated for Sperry Drilling until the end of the calendar year: Transcript, p.208 at [25]-[47];
c)there was no drilling work available in 2015, but there was some consultancy work, nevertheless, even though there was no work in the second half of 2015 Halliburton was committed to having a core team of two coordinators and 12 engineers to support two potential rigs, however determining that core team, relying upon the guidance of the country manager at the time, was based “more around” the skill set and the competency of the employees, such as additional skill sets that could be brought into the office or work on consultancy or interact with customers or wider technical field experience: Transcript, p.209 at [15]-[47]; and
d)there would have been some MLT work in the third and fourth quarter of 2015 and Mr Laurance was aware that directional drillers had previously been used to a limited degree, for MLT work however, this is generally driven and managed by specifically trained MLT technical people: Transcript, p.210 at [14]-[26].
Mr Blawan’s Evidence
Mr Blawan is employed by Halliburton, and has been since 2000, currently holding the position of Measurement-While-Drilling/Logging-While-Drilling Operations Leader of Australasia, having held that role since September 2013: Blawan Affidavit at [1]-[6]. The Blawan Affidavit detailed the primary roles Mr Blawan undertakes in his position including selecting personnel based on the job complexity and skill set and the regularly liaising with the 'lead engineer' on any given rig about the work occurring on that rig: Blawan Affidavit at [17]. Mr Blawan indicated that as a part of his role he had an involved knowledge of the payment structure including supervising the bonuses that could be earned for a job and also reviewing the bonus timesheets completed by the Applicants: Blawan Affidavit at [18]-[19]. Mr Blawan supervised only Mr Fong and Mr Regan from October 2011 until June 2015: Blawan Affidavit at [25].
Mr Blawan gave evidence of the nature of the work Directional Drillers were required to undertake including qualifications, expectations and duties of employees, tool use and the various classifications an employee could fall within in terms of pay structure: Blawan Affidavit at [38]-[86].
In respect of pay structure it was Mr Blawan’s understanding both Mr Fong and Mr Regan were VPE’s, and based on his experience ODR was a form of compensation for being at a location or rig site that was not a traditional working environment, but often a “hostile location”, and for being away from family and “civilisation”. Furthermore ODR was only paid for work on a rig site where the customer was invoiced: Blawan Affidavit at [118]. Mr Blawan also understood that the ODR was dependent upon market conditions, employment contract specifics and client arrangements: Blawan Affidavit at [121].
Mr Krawek’s Evidence
Mr Krawek is employed as a Drilling Energy Solutions Upstream Optimisation Expert by Halliburton, from December 2009 Mr Krawek was the Directional Drilling Coordinator for Halliburton employees based in Indonesia, between February 2011 and 2013 Mr Krawek was the Directional Drilling Coordinator for Halliburton employees based in Perth and from August 2013 until April 2017 Mr Krawek acted as the Directional Drilling Coordinator for Halliburton employees based in Thailand: Krawek Affidavit at [1]-[17].
Mr Krawek gave very detailed evidence as to the nature and scope of drilling and MLT work undertaken by Halliburton employees, and the duties (including training) carried out by employees engaged in those activities: Krawek Affidavit at [17]-[226].
Mr Krawek said that as Mr Lopez’s supervisor he understood Mr Lopez worked as required but also had appropriate rest breaks whilst on rigs: Krawek Affidavit at [229], and was paid as a VPE: Krawek Affidavit at [231].
Mr Krawek said that ODR is only paid when a person is working on a rig or, at the discretion of the relevant co-ordinator, a half or full rate may be paid for certain training or office based work: Krawek Affidavit at [236].
Consideration
Although this application has been attended by numerous pre-hearings directions listings, a lengthy (five day) hearing, eleven witnesses, and, in total, thousands of pages of affidavits and their annexures, exhibits and Transcript, and broad ranging evidence and argument, the resolution of each of the issues in dispute is not complex, and rests upon a far more limited spectrum of evidence and argument than that which was ranged over at hearing.
Shift Work Additional Annual Leave Claim
Section 87(3) of the FW Act reads:
(3) An award/agreement free employee qualifies for the shiftworker annual leave entitlement if:
(a) the employee:
(i) is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and
(ii) is regularly rostered to work those shifts; and
(iii) regularly works on Sundays and public holidays; or
(b) the employee is in a class of employees prescribed by the regulations as shiftworkers for the purposes of the National Employment Standards.
The first point to be made is that none of the Applicants can be said to be “employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week”.
There is no evidence that Halliburton is an enterprise, that is “a business, activity, project or undertaking”: FW Act, s.12, which operates a continuous shift roster.
The Applicants variously gave evidence of having to work, sometimes quite often, but sometimes irregularly, but also
a)for varying periods of time ranging from two days to seven weeks (but mostly it seems three or four weeks at a time);
b)for varying daily periods of time ranging from 12 hours to 24 hours (but mostly 12 hours); and
c)at varying times (but mostly from 6am to 6 pm, or 6pm to 6 am)
in the enterprises of others whilst the Applicants provided the services which Halliburton were engaged to provide to those other enterprises.
The Applicants also gave evidence of:
a)field breaks during which they did not work “shifts”; and
b)work performed, sometimes for lengthy periods, in office, workshop and control centres, environment, both for Halliburton, but also for other enterprises (for example, Chevron), and sometimes from Monday to Friday in “normal” office hours.
The working arrangements described by the Applicants were also not those of employees regularly rostered to work shifts. The shifts that the Applicants did work were regular while the Applicants worked a particular swing, but were otherwise irregular. They were also not “regularly rostered”.
In Shop, Distributive & Allied Employees’ Association v Harris Scarfe Australia Pty Ltd [2014] FCA 283 (“Harris Scarfe”) the Federal Court considered the phrase “rostered to work.” The Federal Court concluded at [35] per Buchanan J that:
Rosters for full-time and part-time employees thus represent an allocation of their contracted weekly hours of work. They are not just a forecast of that work, although they serve that purpose.
In ECH Incorporated v Halliday & Ors [2011] FCAFC 51; (2011) 192 FCR 281; (2011) 207 IR 76; (2011) 63 AILR 101-332 the Full Court of the Federal Court at [37] per Gray J (“ECH”) stated:
An employer who circulates a blank roster, and invites employees to insert their names to indicate that they are willing to work particular shifts, would not be able to succeed in the defence that the employee had made a request permanently to work the shifts chosen.
Harris Scarfe and ECH highlight the importance of specificity and allocation of work in a roster.
There was no evidence in this case of a roster or regular rostering of a kind traditionally associated with shift work. Further, it simply cannot be said, on the evidence, that any of the Applicants were “regularly rostered to work … shifts” by Halliburton. In so far as they did work shifts, those shifts were demand driven at the behest of those to whom Halliburton provided its services. Finally, it is notable that the evidence indicated that if any one of the Applicants wished not to work, for example on a particular rig that they had been asked to work on , they could avoid that, instanter it would seem, by saying they were taking annual leave: Transcript, p.76 at [22]-[26]. Such an ad hoc and fluid arrangement is the antithesis of the regularly rostered shift work referred to in s.87(3)(a)(ii) of the FW Act.
Finally, it cannot be said that the Applicants “regularly work[s] on Sundays and public holidays” within the meaning of that phrase in s.87(3)(a)(iii) of the FW Act. The arbitral pre-history and legislative history of that phrase is well traced in Halliburton’s written submissions. It suffices to say that the Court accepts that Parliament intended the phrase quoted above to reflect the meaning attributed to it by reason of its arbitral history.
On the Applicants own evidence, and on that for Halliburton in the Easter Affidavit at [434]-[440], it cannot be said that any of the Applicants met worked the accepted industrial standard of 34 Sundays and 6 public holidays (or even the lesser but anomalous standard of 35 Sundays and public holidays) at any time.
It follows that the Applicants do not meet any of the individual elements in s.87(3)(a)(i)-(iii) of the FW Act for the grant of an extra weeks annual leave, let alone all of them conjunctively (which is a requirement because of the drafter’s use of “and” at the end of each placita). It follows that the claim for an additional weeks annual leave pursuant to s.87(3)(a) of the FW Act is not made out.
Tax Claim
The Applicants in closing submissions abandoned the Tax Claim: Transcript, p.326. The Applicants did so notwithstanding Mr Fong and Mr Albanis had been the subject of cross-examination on the issue and Halliburton had made closing submissions addressing the issue. The Applicants gave no indication of the reason they abandoned the Tax Claims, or when it became apparent they were going to do so.
Senior Counsel for Halliburton made note early in the proceedings that the Applicants written submissions on the Tax Issue comprised just three paragraphs and were unsatisfactory in placing Halliburton on notice of the exact basis on which the Tax Claims were brought. Halliburton provided detailed written submissions devoted to the Tax Claims, and during the course of the hearing when providing oral submissions Senior Counsel for Halliburton tendered further written submissions to assist the Court with the Tax Issue, which involved jurisdictional, legal and factual issues of some complexity.
In the course of cross-examination of Mr Fong and Mr Albanis significant time was given over to questioning on the Tax Issue.
In closing submissions, and before the abandonment of the Tax Claim, Halliburton stated it would like the right to be heard on any costs pursuant to s.570(2) of the FW Act at a later date. In the circumstances, the Court is of the view that, notwithstanding the limitations in s.570(2) of the FW Act, Halliburton ought to have leave to file and serve, within 10 days, an application in a case for the costs of the Tax Claim.
ODR on Base Rate of Pay claim – annual leave and redundancy
The Applicants say that their annual leave and redundancy payments ought to have included a component for the payment of an Operating Day Rate (“ODR”) paid to them, because the payment was properly part of their “base rate of pay” as prescribed by s.16(1) of the FW Act, payable on annual leave and redundancy in accordance with ss.90(1) and (2) and 119(2) of the FW Act.
Section 16(1) of the FW Act provides as follows:
(1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
The evidence plainly establishes that Halliburton treated, and paid, the ODR as a discretionary bonus. There is no doubt that it was paid as often, and indeed more often, than not. That however merely reflected the nature of the bonus and the conditions upon which it was paid, and in particular that it was payable for work in remote places, but also for work under other arduous conditions, and sometimes for particular types of training or workshop activity. For Mr Conway it seemed that ODR, and sometimes half ODR, was payable because he had requested it in relation to particular kinds of travel events and meetings, and Halliburton had agreed, in the exercise of its discretion, to pay it for those events and meetings.
The variety of circumstances for which ODR was paid, the circumstances in which sometimes only half ODR was paid, and the different circumstances and payments to individuals, all reflect the nature of the ODR payment as one which was both a bonus and a bonus payable, either at all or as to quantum, in the exercise of Halliburton’s discretion.
The characterisation of the ODR as a bonus is reflected in the documentary evidence as to its nature: see, for example, the versions of the Sperry Drilling Services Variable Paid Field Employees (VPE) Australia Local Staff Structure (the 2015 version of which is at Easter Affidavit, Annex. LE-23), which:
a)differentiate between base salary and other payments such as the ODR; and
b)describe day rate bonuses as “separate and distinct bonus payments for acceptably performing specific tasks and are “bonuses” given at the discretion of company management”.
The Court is satisfied that the evidence establishes that the ODR is a bonus, and was paid as such to the Applicants, and is therefore not part of their base rate of pay as defined in s.16(1) of the FW Act because, as a bonus, it falls within the exclusion in s.16(1)(a) of the FW Act. The Court is also satisfied that if the ODR is not a bonus then it is an “other separately identifiable amount” and would therefore fall within the exclusion in s.16(1)(e) of the FW Act. That the ODR is an “other separately identifiable amount” is apparent from the fact that the Applicants’ monthly pays included separate components for:
a)the current months base rate of pay or salary; and
b)the previous months ODR, when payable (emphasis added).
It follows that the claim for the ODR to be paid as part of the “base rate of pay” as defined in s.16(1) of the FW Act, for the purposes of annual leave and redundancy pay is not made out.
ODR on Payment in Lieu of Notice
The Applicants say that their payment in lieu of notice upon redundancy under s.117(2)(b) of the FW Act ought to have included a component for the payment of the ODR paid to them, because the payment was properly part of their “full rate of pay” as defined by s.18(1) of the FW Act.
Section 18(1) of the FW Act provides as follows:
(1) The full rate of pay of a national system employee is the rate of pay payable to the employee, including all the following:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
Section 117(2)(b) of the FW Act provides as follows:
(2) The employer must not terminate the employee's employment unless:
(a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice ) worked out under subsection (3); or
(b) the employer has paid to the employee (or to another person on the employee's behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee's behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
Each of the Applicants was made redundant. That means that there was no future work available for them. Each of the Applicants was on a field break and being paid their base rate of pay only at the point in time at which they were redundant.
Section 117(2)(b) of the FW Act required that the Applicants be paid “the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice”.
There is no evidence that the Applicants would have done anything other than continued upon their field break on their base rate of pay had they had to work out their notice period. Further, their redundancy meant that there was no other work for them to do. In those circumstances the Applicants would have continued to be paid their base rate of pay if they had to work out their notice period. For these purposes their base rate of pay was their full rate of pay for the notice period. There was no work to be performed which would normally have attracted approval of the ODR, or any evidence that Halliburton would have exercised its discretion to authorise payment of the ODR during this period.
It follows that the claim for the ODR to be paid as part of the “full rate of pay” as defined in s.18(1) of the FW Act payable for the hours the Applicants would have worked had they worked out their notice periods as part of their payment in lieu of notice under s.117(2)(b) of the FW Act is not made out.
ODR - Long Service Leave Claim
The Applicants allege that they were entitled to be paid long service leave on termination at a rate which included the ODR.
Section 4(1) and (2) of the LSL WA Act provides as follows:
4. Interpretation
(1)... ordinary pay means subject to subsection (2), remuneration for an employee’s normal weekly number of hours of work calculated on the ordinary time rate of pay applicable to him, as at the time when any period of long service leave granted to him under this Act commences, or is deemed to commence, and where the employee is provided with board and lodging by his employer, includes the cash value of that board and lodging, where such board and lodging is not provided and taken during the period of leave, but does not include shift premiums, overtime, penalty rates, allowances, or the like.
(2) For the purpose of the interpretation of “ordinary pay” in subsection (1) — ...
(b) where the employee is employed on piece or bonus work or any other system of payment by results, the employee’s rate of pay during any period when the employee is on long service leave is the average weekly rate earned by him while in employment during the period of 12 months —
(i) ending on the day immediately preceding that on which he commences long service leave or would but for payment in lieu of long service leave have commenced long service leave, if he is then in employment; or
(ii) ending on the day immediately preceding that on which he was last in employment, if he is not then in employment; or
(iii) ending on the day immediately preceding that of his death,
as the case requires; and
(c) where the normal weekly number of hours have varied over the period of employment of a full-time, part-time or casual employee the normal weekly number of hours of work shall be deemed to be the average weekly number of hours worked by the employee during that period of employment (calculated by reference to such hours as are ascertainable if the hours actually worked over that period are not known); and
…
(e) where by agreement between the employer and the employee the commencement of the leave to which the employee is entitled or any portion thereof is postponed to meet the convenience of the employee, the rate of payment for such leave shall be at the ordinary time rate of pay applicable to him at the date of accrual or, if so agreed, at the ordinary time rate of pay applicable at the date he commences such leave.
The “ordinary time rate of pay” under s.4(1) of the LSL WA Act does not include “shift premiums, overtime, penalty rates, allowances or the like”.
The Court has already found that the ODR was a bonus. There is no doubt that the ODR, albeit discretionary, was paid for “shifts” worked on rigs by the Applicants. It was also paid in those circumstances, and others, as a reward for particular work performed. On the evidence of the Applicants they certainly saw it as part of the incentive to work, for example, on rigs at unsociable times and for lengthy continuous periods of time (their “swings”).
A “premium” includes a “reward given for some specific act or as an incentive” and a “bonus”: The Shorter Oxford English Dictionary on Historical Principles, Vol. II (Oxford: Clarendon Press, 1973), p.1656
The ODR therefore constituted a “shift premium”, or something like a shift premium, for the purposes of s.4(1) of the LSL WA Act. It is therefore not included in the “ordinary time rate of pay” under s.4(1) of the LSL WA Act. It follows that the claim for payment of long service leave on termination at a rate including the ODR is not made out.
Although in light of the above finding it is strictly unnecessary to go further, the Court notes that with specific relation to Mr Lopez and Mr Regan there is further reason that the long service leave claim cannot succeed. And that is that neither of them meets the service requirement of seven years under s.8(3) of the LSL Act (WA), Mr Lopez having served Halliburton for just over six years, and Mr Regan for just over four years. Prior service by them with different foreign entities forming part of the Halliburton Group did not qualify as service with the one employer, or service with an entity with a substantial connection with Western Australia, sufficient to qualify them for long service leave: Baker Hughes Australia Pty Ltd v Venier (2016) 96 WAIG 1488; Pearce v Florenca (1976) 135 CLR 507; Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1. It follows that insofar as the long service leave claim made by Mr Lopez and Mr Regan was based on the terms of the LSL WA Act it could not have succeeded in any event.
Mr Fong’s Annual Leave Claim
Mr Fong makes a claim for an entitlement for annual leave said to have been denied him whilst working on an International Commuter Assignment (“ICA”) in Indonesia from July 2010 to January 2011 under a specific ICA Agreement: Easter Affidavit, Annex.LE-34, which contained express provision that it superseded all previous agreements. In Appendix B the ICA expressly provided that for the six month period concerned so called “field breaks” would “compensate a number of factors including holiday breaks and no additional leave or vacation provisions apply”. The contractual effect of that provision was to provide for annual leave to be taken as a field break or breaks, and therefore the entitlement claimed does not arise: FW Act, s.94(6).
In any event, s.94(5) of the FW Act provides that an employer “may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable”. Given that the ICA required Mr Fong to work on a particular assignment, in a particular place, and for a fixed period during which there were periods that he was not required to work (the field breaks), the requirement to take paid annual leave during those periods was in the Court’s view reasonable. That view is reinforced by the fact that the HI Award, applicable to award employees in the industry contains a provision to similar effect to that in Mr Fong’s ICA.
It follows that Mr Fong’s annual leave claim is not made out.
Conclusion and Orders
The Court has concluded that:
a)none of the Applicants’ claims have been made out; and
b)Halliburton ought to have leave to file and serve an application in a case for the costs of the Tax Claim made by Mr Fong and Mr Albanis.
There will be orders accordingly.
I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 10 October 2019
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