Giltrap v Czeschka

Case [2022] FedCFamC2G 715

Federal Circuit and Family Court of Australia

(DIVISION 2)

Giltrap v Czeschka [2022] FedCFamC2G 715

File number(s): ADG 121 of 2020
Judgment of: JUDGE LUCEV
Date of judgment: 31 August 2022
Catchwords: INDUSTRIAL LAW – dismissal from employment – whether rescission of dismissal from employment – date of dismissal or dismissals – number of employees at time of dismissal or dismissals – whether employee or independent contractor – whether casual employee employed on a regular and systematic basis – whether employer a small business employer
Legislation: Fair Work Act 2009 (Cth) ss 23, 117, 119, 121, 570
Cases cited:

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; (2004) 217 CLR 424; (2004) 206 ALR 387; (2004) 78 ALJR 907; [2004] Aust Torts Reports 81-752

Birrell v Australian National Airlines Commission (1984) 5 FCR 447; (1984) 9 IR 101

Climaze Holdings Pty Ltd (t/as Alan Croll Roofing) v Dyson (1995) 13 WAR 487

Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 96 ALJR 89; (2022) 312 IR 1

Frederick v South Australia [2006] SASC 165; (2006) 94 SASR 545; (2006) 152 IR 182

Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121; (1988) 63 ALJR 80; (1988) 82 ALR 626; (1988) 14 ACLR 493

Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1; (2012) 64 AILR 250-033

Lee v Lee’s Air Farming Ltd [1961] AC 12

New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371; [2002] Aust Torts Reports 81-676; (2002) 115 IR 283; (2002) 52 AILR 5-410

Port Kembla Coal Terminal v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99; (2016) 248 FCR 18; (2016) 263 IR 344

R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-Operative Ltd (1977) 16 SASR 6; (1977) 44 SAIR 1202

Riordan v War Office [1959] 3 All ER 552; [1959] 1 WLR 1046

Riordan v War Office [1961] 1 WLR 210

Thomson v Kimberly College Ltd & Ors [2020] FCCA 3361

ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 96 ALJR 144; (2022) 312 IR 74
Division: Division 2 General Federal Law
Number of paragraphs: 86
Date of last submission/s: 27 August 2021
Date of hearing: 27 August 2021
Place: Perth
Counsel for the Applicant: Mr R Manuel via CISCO Webex
Solicitor for the Applicant: WBH Legal
Counsel for the Respondents: Mr A Potts via CISCO Webex
Solicitor for the Respondents: Morgan Alteruthemeyer

ORDERS

ADG 121 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

STEPHEN CRAIG GILTRAP

Applicant
AND:

JOSEF CZESCHKA

First Respondent

SIMON BRENNAN

Second Respondent

L2S ENGINEERING PTY LTD

Third Respondent

order made by:

JUDGE LUCEV

DATE OF ORDER:

31 august 2022

THE COURT ORDERS THAT:

1.The matter be adjourned to a directions hearing at11.00am ACST/9:30am AWST on…

Continue reading Giltrap v Czeschka

Sign in free to access the full text

Details
AGLC
Giltrap v Czeschka [2022] FedCFamC2G 715
Case
[2022] FedCFamC2G 715
Decision Date

CaseChat Overview and Summary

Giltrap v Czeschka is a case before the Federal Circuit and Family Court of Australia that involves three main issues. The first issue is to determine the date or dates when Mr Giltrap's employment with L2SE was terminated. The second issue is whether the termination of Mr Giltrap's employment by L2SE on 20 December 2019 was subsequently rescinded. The third issue is whether L2SE was a small business employer with fewer than 15 employees for the purposes of ss 121 and 23 of the Fair Work Act 2009 (Cth) as at the date or dates of termination of Mr Giltrap's employment. The evidence presented by Mr Giltrap includes his affidavit stating that he was terminated on 20 December 2019 and subsequently re-employed on 6 January 2020. The court has to decide if there was consent to the rescission of the termination of employment on 20 December 2019.

The court's reasoning in resolving these issues is based on the current state of the law in Australia, which holds that the rescission of a termination of employment can only be effected by consent of the parties to the contract of employment. The court found that Mr Giltrap consented to the rescission of the 20 December 2019 termination of employment. Therefore, the court concluded that the termination of Mr Giltrap's employment by L2SE on 20 December 2019 was rescinded, and the question of whether L2SE was a small business employer must be answered as at 9 January 2020 only. The court has concluded that as at 9 January 2020 L2SE employed 14 employees for the purposes of s 23 of the Fair Work Act 2009 (Cth). The matter will be adjourned to a directions hearing at which time the parties can make submissions as to whether any declarations or orders are necessary as a consequence of these Reasons for Judgment, and as to what, if any, further directions are required to be made.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

There are three primary issues to be determined in relation to the case presently before the Court. They are as follows:(a)on what date or dates was Mr Giltrap’s employment with terminated by L2SE?;(b)if Mr Giltrap’s employment was terminated by L2SE, for the first time, on 20 December 2019, was that termination subsequently rescinded?; and(c)was L2SE a small business with fewer than 15 employees for the purposes of ss 121 and 23 of the FW Act as at the date or dates of termination of Mr Giltrap’s employment?The evidenceEvidence of Mr Giltrap Mr Giltrap gave evidence that:(a)he was engaged by L2SE as a project manager on a full-time permanent basis, commencing on or around 25 October 2017;(b)the terms of his employment were contained in a written employment contract dated 25 October 2017 ( “Contract of Employment”); and(c)pursuant to the Contract of Employment he was to work 40 hours per week from Monday to Friday at the rate of $100,000 per year, and that he was paid at that rate between 25 October 2017 to 11 November 2019, but that in breach of his contract from 11 November 2019 onwards he was paid at the rate of $95,014.14, a reduction in relation to which he was not consulted, and to which he did not consent. The Contract of Employment provides for termination of employment at cll 1.8 and 1.9. Clause 1.8 provides for summary dismissal at any time without notice, but only for the commission of “any act of serious misconduct”. Clause 1.9 provides for termination of employment by L2SE by the giving of one week’s notice (and an additional week for an employee aged over 45 with at least two years continuous service). The Court notes that clause 1.9 of the Contract of Employment is not in complete accord with the periods of notice required to be given or paid in lieu of notice under s 117 of the FW Act. Clause 1.10 of the Contract of Employment sets out various entitlements to remuneration, accrued leave, and other entitlements under the Contract of Employment or by law upon termination of employment. In relation to the events between 20 December 2019 and 9 January 2020 Mr Giltrap’s Affidavit evidence was that:(a)on 20 December 2019 he was advised by email (the email is not in evidence) by Mr Czeschka Snr, a director of L2SE, that he was being made redundant, effective immediately;(b)he was not provided with a formal termination letter;(c)he was not paid any entitlements at the time of dismissal, nor was he told that entitlements would be paid to him, and he was not consulted in any way in relation to the 20 December 2019 redundancy;(d)as 20 December 2019 was the final day of work prior to the Christmas break he did not attend work, and he was also not able to contact Mr Czeschka Snr to discuss his termination as “L2S had shut shop”: Giltrap Affidavit at [11];(e)on approximately 30 December 2019 Mr Giltrap was advised by telephone by Gordon Gendall, an employee of L2SE to return to work as L2SE had been purchased by a new company;(f)annexed a company search for L2SE;(g)on 6 January 2020 Mr Giltrap returned to work on the assumption that he would sign a new employment contract, but he was not presented with any documentation, nor was he given a Fair Work Information Sheet, or access to any applicable Award;(h)on 7 January 2020 Mr Giltrap spoke to a Mr Brennan, by telephone, and discussed some aspects of L2SE’s business in the Northern Territory, and made enquiries as to whether there would be further investment in the Northern Territory operations, and says that he was told by Mr Brennan that there would be such investment, but that at no time during this conversation did Mr Brennan mention or allude to any job changes or redundancies;(i)on 9 January 2020 Mr Brennan advised Mr Giltrap that he was being made redundant, effective immediately;(j)Mr Giltrap received a termination letter on 9 January 2020 (“January 2020 Termination Letter”) which he says indicates that he was being made redundant, and advised him that he was being paid one week’s notice as he had been employed at L2SE for less than 12 months;(k)the terms of the January 2020 Termination Letter, including the “Redundancy Payout Summary” are as follows (reproduced unaltered, save for redacted address):9 January 2020Stephen Giltrap[address redacted]Darwin NT 0830Dear Stephen, RE: TERMINATION OF YOUR EMPLOYMENT ON NOTICE The purpose of this letter is to confirm the outcome of a recent review by L2S Engineering Pty Ltd (the employer) of its operational requirements and what this means for you. As a result of economic downturn, the full-time position of Project Manager is no longer required so we regretfully advise that your employment with L2S Engineering Pty Ltd is terminated immediately. As such any L2S Engineering property or equipment is to be return in good working order immediately also. Please see attached for an estimate of your final pay to be processing on Friday 17 January 2020 which will include 1 weeks’ notice in accordance with Clause 1.9 Termination of Your Employment on Notice from your Employment Contract with L2S Engineering Pty Ltd as you have not yet completed two full years of service. At time of payment, you will also be provided with a copy of your employment separation certificate that will be filed with Centrelink/Human Services. Should you have any queries or further information that may vary this estimate, please contact me directly by email so we are able to maintain HR records of all communications. We thank you for your contribution during your employment with us. Yours sincerely L2S Engineering Pty Ltd Simon Brennan Managing Director51 Burlington Street Naval Base WA 6165 (PO Box 2310, Rockingham DC WA 6967)(08) 9410 0787 L2se.com.auRedundancy Payout SummaryCommencement Date:30 October 2017Finish Date: 16 January 2019Employment Classification: Project ManagerClassification: Full TimeSalary: $100,000.00Annualised Hourly Rate: $45.68Hours per week: 38Payment Type Weeks Hours Total Hours CostHours Worked to 9/1/20 38 38 $1,735.84Unused Annual Leave 72 72 $3,288.96Notice in Lieu 38 38 $1,735.84Redundancy $0.00Total Payout $6,760.64

Decision

Reasons for decision

Having regard to L2SE’s concession that as at 9 January 2020 it employed 14 employees for the purposes of s 23 of the FW Act, and the Court’s conclusion that none of the seven employees considered above were as at 9 January 2020 employees for the purposes of s 23 of the FW Act, the Court has concluded that as at 9 January 2020 L2SE employed 14 employees for the purposes of s 23 of the FW Act.Conclusions and Orders The Court has concluded that:(a)Mr Giltrap consented to the rescission of the 20 December 2019 termination of employment; and(b)as at 9 January 2020 L2SE employed 14 employees for the purposes of s 23 of the FW Act. The matter will be adjourned to a directions hearing at 11.00 am ACST/9:30 am AWST on 9 September 2022 by videolink at which time the parties can make submissions as to whether any declarations or orders are necessary as a consequence of these Reasons for Judgment, and as to what, if any, further directions are required to be made. Having regard to the provisions of s 570 of the FW Act the costs of this bifurcated hearing, if any, are reserved.

Ratio Decidendi

Legal Principle Established

In re-examination Mr Brennan said that the re-employed employees were treated by L2SE as if their employment was continuous (that is that the termination on 20 December 2019 had not occurred) and their entitlements were fully maintained: Transcript, page 39.ConsiderationWhether rescission of 20 December 2019 termination of employmentLaw concerning rescission of termination of employment In Riordan v War Office [1959] 3 All ER 552; [1959] 1 WLR 1046 at 1054 per Diplock J (affirmed on appeal in Riordan v War Office [1961] 1 WLR 210 ) it was said that:… the giving of a notice terminating the employment, whether by employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end, either immediately or in the future. It is a unilateral act, requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent. In Birrell v Australian National Airlines Commission (1984) 5 FCR 447; (1984) 9 IR 101 (“Birrell”), FCR at 458 per Gray J the Federal Court observed that:The purpose of providing in a contract for a period of notice of termination is to enable the party receiving the notice to make other arrangements. An employee given notice by his or her employer has a period of time in which to seek another job; an employer who receives notice has time to arrange for a substitute employee. It would be harsh if arrangements so made during the running of the notice could be disrupted, and parties could be held to their contracts by unilateral withdrawal of the notice at the last minute. Such withdrawal, if possible, could lead to an employee being bound by contracts of employment with two employers, or an employer being bound by contracts of employment with two employees, each being required to give notice to one or the other in order to be extricated from this position, or possibly to suffer the requirement to forfeit or pay wages for a period of time. In my view, I should lean against the adoption of any principle which could lead to such unfortunate consequences, and I should follow the authorities which tend to establish that withdrawal of a notice of termination of a contract of employment can only be effected by consent of both parties. Birrell reflects the current state of the law in Australia: see New South Wales v Paige [2002] NSWCA 235; (2002) 60 NSWLR 371; [2002] Aust Torts Reports 81-676; (2002) 115 IR 283; (2002) 52 AILR 5-410 at [277] per Spigelman CJ; Frederick v South Australia [2006] SASC 165; (2006) 94 SASR 545; (2006) 152 IR 182 at [73]-[75] per White J; Hodgson v Amcor Ltd [2012] VSC 94; (2012) 264 FLR 1; (2012) 64 AILR 250-033 at [422]-[428] per Vickery J. It follows from the law as set out above that the rescission of a termination of employment can only be effected by consent of the parties to the contract of employment, in this case, Mr Giltrap and L2SE. Although several questions are raised by the issues posited at [6] above, the key to the resolution of those issues is firstly to determine if there was consent to the rescission of the undoubted, because it is not in dispute, termination by L2SE of the contract of employment on 20 December 2019. If that question is answered in the affirmative, that is, that there was consent, then the question of whether L2SE was a small business employer as at 20 December 2019 falls away, and it is only necessary to ask and answer the question of whether L2SE was a small business employer as at 9 January 2020. If that question is answered in the negative, that is, that there was no consent, then the question of whether L2SE was a small business employer must be answered as at both 20 December 2019 and 9 January 2020, as if there was no rescission of the termination of employment on 20 December 2019 then there were two contracts of employment between Mr Giltrap and L2SE which were terminated: the first terminating on 20 December 2019, and the second commencing on 6 January 2020 and terminating on 9 January 2020.