Garry Wrench v Thiess Degrémont Joint Venture

[2012] FWA 8314

[2012] FWA 8314

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Application for unfair dismissal remedy

Garry Wrench
v
Thiess Degrémont Joint Venture
(U2012/3760)

DEPUTY PRESIDENT SMITH MELBOURNE, 2 OCTOBER 2012

Termination of employment - whether genuine redundancy.

INTRODUCTION

[1] Mr G. Wrench seeks relief in relation to his termination of employment by Thiess Degrémont Joint Venture (Joint Venture). Mr Wrench was terminated on 22 December 2011 on the basis that his position was redundant. The matter followed the usual process where a voluntary telephone conference was convened by an Officer of Fair Work Australia (FWA) before the matter was allocated to a Member of the Tribunal. During this process it is argued by the Joint Venture that agreement was reached. Mr Wrench contests that he reached agreement and that there was a genuine redundancy resulting in the termination of his employment. Mr Wrench sought for the matter to be determined by the Tribunal.

[2] In response to the position taken by Mr Wrench, the Joint Venture made two applications: one to dismiss the application as frivolous, vexatious or has no reasonably prospect of success (s.587 of the Fair Work Act 2009 (the Act)) and the other, in the event that its first application did not succeed, that security of cost should be ordered (s.404 of the Act).

BACKGROUND

[3] Mr Wrench was employed by the Joint Venture on the project to construct the Desalination Plant near Wonthaggi in Victoria. As construction was nearing completion there was as systematic reduction in the amount and type of work to be undertaken. This led to a reduction in the number of employees. Retrenchments began with employees in civil works, then mechanical and plumbing and finally electrical. Mr Wrench was in the mechanical workforce. He is qualified to perform all types of welding.

[4] There is no issue that consultations were fulsome with the various unions on site about the flow of work and the staged reductions in employee numbers and skills needed. Processes were agreed and the Joint Venture was acting in accordance with those agreed processes. On 22 December 2011, Mr Wrench was notified that he had been selected for redundancy and that he would be given a letter of termination later that day. Benefits were paid which were not contained within the Thiess Degrémont and the AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009 (the Agreement).

[5] In accordance with an agreement reached with the AMWU on behalf of mechanical employees, all persons made redundant could dispute their selection for redundancy. On 4 January the AMWU advised the Joint Venture that 12 employees were challenging their selection—Mr Wrench was among that group.

[6] This challenge would be considered by what was called the VDP Project Disputes Panel. The AMWU and the Joint Venture had agreed that the following procedure would apply whilst consideration was being given to any challenge:

• The termination of the employee’s employment will take effect and remain in place while this procedure is followed;



• The Project Disputes Panel (PDP) will be requested to convene urgently to review the circumstances of the employee’s selection for retrenchment;



• Both the AMWU and Thiess Degrémont (TD) will accept the PDP members determination;



• This procedure is not subject to review by, or appeal to, Fair Work Australia;



• In the event that TD’s decision to terminate the employment of an employee is overturned by the PDP, TD would be obliged to reinstate the employee with no loss of entitlements and make payment of lost wages for the duration of the absence from work;



• If an employee is reinstated, TD may retrench an alternative employee in place of the reinstated employee; and



• If an employee is reinstated, she/he will be required to repay to TD the termination entitlements received. If the employee is unable to repay those entitlements, such payments will be retained by the employee and offset against the termination entitlements that becomes payable when that employee’s employment is eventually terminated from the Project.

[7] Mr Wrench’s case was heard by the PDP on 9 January 2012 with the support of the AMWU and he was not successful. Notwithstanding that there was an agreement that the process would produce a binding recommendation, Mr Wrench had lodged an application with the Tribunal on 2 January 2012.

[8] On 9 February an Officer of Fair Work Australia chaired a conference to explore the possibility of settlement of the application lodged by Mr Wrench.

THE EVIDENCE

[9] Four witnesses gave evidence. They were:

• Ms L. Cherry—the FWA Officer who conducted the telephone conference. Ms Cherry was requested to give evidence by the Joint Venture.



• Mr G. Wrench—the applicant.



• Ms J. Timms—the applicant’s girlfriend.



• Mr J. Andrews—Employee Relations Advisor for Thiess Pty Ltd.

[10] I will deal firstly with the evidence as it relates to whether or not an agreement was reached.

[11] Ms Cherry’s evidence was that she thought an in principle agreement had been reached between the parties following what she conceded was a telephone conciliation which at times was difficult because of the static on the telephone line with Mr Wrench. Ms Cherry recalled that she advised the parties at the commencement of the conference that “If an agreement is reached it will be written up in principle and upon signing by both parties it will become a legally enforceable agreement.” (Transcript PN 146).

[12] Ms Cherry confirmed that the matter had been recorded within the internal system as resolved.

[13] The evidence of Ms Timms was that:

• She thought Mr Wrench was entitled to a statement of service and his demobilisation rating.



• It was not agreed that Mr Wrench would provide a release to Thiess.



• There was difficulty with the telephone communication.

[14] Mr Wrench gave evidence about his selection for redundancy and the conference convened by Ms Cherry. In relation to the redundancy, it was his evidence that:

• His performance was of a high standard;



• He could have been redeployed within the enterprise;



• There was no consultation about his redundancy;



• Contractors were still be hired following his dismissal;



• He believed that a concern about health and safety led to his selection for redundancy; and



• He did not believe that he was represented well by the AMWU although he remains a member.

[15] In relation to the conference chaired by Ms Cherry, Mr Wrench stated that no agreement was reached. It was his evidence that he agreed to examine a draft proposal put forward by Thiess. His evidence was that he was entitled to both the statement of service and his demobilisation rating and that nothing else was offered.

[16] Mr Andrews then provided evidence. He was not cross-examined on his evidence. Mr Andrews:

• Provided a review of the history and operation of the Agreement.



• Stated that the parties to the Agreement anticipated a staged “de-mobilisation” as the plant became fully operational.



• Provided details of the identification of roles and how they would be reduced as the need changed.



• Provided details of the consultative process entered into with by the AMWU and the CFMEU on the “demobilisation” redundancy process.



• Provided details on the selection process for redundancy.



• Provided details of the process adopted for disputing redundancy.



• Provided details of the PDP hearing where two AMWU officials made submissions as well as the representative from Thiess in relation to the redundancy selections.



• Stated that notwithstanding the terms of the Agreement about the binding nature of the PDP process, at no time did Mr Wrench advise that he had already lodged an unfair dismissal application.



• Stated that at the conference, Mr Wrench was advised that he would not be paid nuisance money nor would he be offered re-instatement because work was no longer available.



• Stated that he did not have any telephone difficulties when speaking to Ms Cherry and that he understood that all that was being sought was a statement of service and the demobilisation rating but that Mr Wrench wanted that rating before he signed a notice of discontinuance. Mr Andrews said that the Thiess would not provide that rating until after he had signed a notice of discontinuance.



• Stated that after a number of telephone discussion Ms Cherry advised that the matter had been resolved. On this basis Thiess sent an email to Ms Cherry advising the terms on which it believed agreement had been reached.

[17] Mr Andrews also provided evidence on the events which occurred after Mr Wrench refused to sign the notice of discontinuance. It was his evidence that Mr Wrench attended Thiess’s community centre and demanded a copy of his demobilisation report and threatened court action if it was not provided. Mr Andrews, in his evidence, stated that he spoke to Mr Wrench after he had elected to continue with the unfair dismissal proceeding and advised him that Thiess thought it had a strong case and that he should be aware of that fact. It was the evidence of Mr Andrews that Mr Wrench:

• Accused him of bullying and harassing him; and



• Stated that “I’m going to take this all the way. I don’t care about costs. I don’t have a job. You can’t get blood out of a stone”.

CONCLUSION

[18] There are two applications made by the Joint Venture. I propose to firstly consider the application which seeks that the matter be dismissed on the basis that an agreement had been reached and therefore that the case is frivolous or vexatious or has no reasonable prospect of success.

[19] To begin, the Joint Venture argues that there exists accord and satisfaction and that the cause of action is extinguished (Australian Postal Corporation v Gorma (2011) 211 IR 450 per Besanko J). It is argued that there was offer and acceptance; consideration passing between the parties; an intention to create legal relations and certainty as to the essential terms. It was submitted that there are public policy considerations as to why the Tribunal should uphold agreements reached between parties.

[20] To begin, it is argued that what took place in conciliation should be available for consideration by the Tribunal on this occasion. I note in passing that the process referred to is entirely voluntary and its prejudice or otherwise is in the hands of the parties. In any event, I agree with the observations of Gooley C in Thomas v Symbion Health ([2011] FWA 5458 at 33-35). Whilst respect must be paid to undertaking given to each other, it cannot be a bar to considering a contested matter such as this. Against the background of the evidence, the question needs to be asked as to whether or not an agreement was present which would give rise to a consideration of factors described in Masters v Cameron ([1954] 91 CLR 353).

[21] The submission of the Joint Venture is predicated on the fact that without signing an agreement it was possible to reach a binding agreement in the circumstances of this case. It is clear that it was not and the circumstances here are very different from those considered in Curtis v Darwin City Council ([2012] FWAFB 8021). Ms Cherry made clear, and I accept her evidence on this point, that that “If an agreement is reached it will be written up in principle and upon signing by both parties it will become a legally enforceable agreement”. The nature of the process is said not to result in enforceable agreements save and except in circumstances where a signed instrument results. This is a cautious approach reasonably adopted in circumstances where, on the telephone, there is little direct contact between the parties and where the FWA Officer is seeking to narrow issue and hopefully produce an agreement. Given the concerns expressed by Mr Wrench about the quality of the telephone line, I accept that he was not fully aware that the Joint Venture was proposing that a final settlement was reached rather than a proposal for him to examine. Each matter of this nature will turn on its own facts.

[22] The conditional nature of the Agreement was also addressed by the Joint Venture. It submitted that the agreement held good. However the factual position is that the Joint Venture would not provide the information sought by Mr Wrench until after he signed a release. The factual position is that he didn’t and the Joint Venture has not provided the information. I was referred to the decision of the High Court in McDermott v Black (1940) 63 CLR 161 at 184-5). Given the evidence of Mr Wrench I entertain doubts as to whether or not there was an intention to even create a conditional contract. His attendance at the community centre would go against the proposition that he was comfortable in signing a full release before obtaining the documents he sought.

[23] In all the circumstances, including the basic approach taken to the process as announced by Ms Cherry, I find there was no agreement.

[24] However that is not an end of the matter, I still need to consider if s.587 applies to the factual circumstances in this matter even if I find that an agreement did not exist. It was the primary submission of the Joint Venture that where an agreement is reached it must be that a continuation of the application is frivolous or vexatious or has no reasonable prospect of success. The joint Venture argues that if I find against them, then an order for security of cost should be made pursuant to s.404. It relied on the statement of Mr Wrench that he didn’t care about the cost and that you could not get blood out of a stone. It was submitted that this demonstrated a desire, on the part of Mr Wrench, to put the Joint Venture through the cost of litigation in circumstances where the joint Venture believed that it had a strong case.

[25] There was as significant amount of material provided in relation to this matter which went to:

• The obligations under the Agreement,



• The consultation with the relevant unions,



• The appeal process in relation to selection for redundancy,



• The work performed at the project and the gradual reduction in employees levels, and



• Whether or not redeployment was possible.

[26] In short, I see little utility in considering an order for security of costs if, on the face of the material before me, I can conclude that there is no reasonable prospect of success and where, it appears, no additional material could be advanced in further proceedings. To permit the matter to proceed to this stage would be to incur costs for Mr Wrench notwithstanding that he feels aggrieved by the decision. However, it must be said that on the extensive material before me, it seems appropriate to conclude that there is no reasonable prospect of success for Mr Wrench. Too many factors weight against him in terms of the industrial relationships between the parties to the Agreement and the conduct of the Joint Venture.

[27] I am minded to dismiss the matter as having no reasonable prospect of success but I will, in the circumstances, provide Mr Wrench with the opportunity of address as to why such a decision should not be made. He will have until close of business 10 October to put any submissions in writing. If I consider it necessary, having read those submissions, to hear from the Joint Venture, I shall provide them with an opportunity to be heard.

DEPUTY PRESIDENT

Appearances:

G Wrench with J Timms on his own behalf.

S Saeedi Solicitor on behalf of Thiess Degrémont Joint Venture.

Hearing details:

2012.

Melbourne:

July, 13.

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